When it comes to elevating performance to unprecedented levels and creating competitive advantage, meaning really matters.
McKinsey consultants Susie Cranston and Scott Keller have been conducting research with management executives for over a decade in an attempt to discover the key drivers of absolute peak performance.
What have they found?
Nothing contributes more to peak performance than having a personal stake in something. They labeled this phenomenon the Meaning Quotient (MQ) of work. Executives stated that employees at their peak of performance, driven by a meaning-rich work environment, were five times more productive than they usually were. Furthermore, more than 90% of executives identified the bottlenecks to peak performance in their organizations as meaning related issues. 1
More than one-hundred studies have now found that the most engaged employees – those who report they’re fully invested in their jobs, committed to their employers, and are working in meaning-rich workplaces – are significantly more productive, drive higher customer satisfaction, and outperform those who are less engaged. 2
And yet Gallup has cited that disengaged employees working in meaning-bare work environments cost the American economy up to $350 billion per year in lost productivity. 3
That’s a lot of disengaged and disenfranchised employees laboring in meaningless conditions.
So where’s the breakdown? Why aren’t managers connecting the dots?
It starts with helping managers fully comprehend the crisis of meaning in the workplace today and helping them understand the potential for serious competitive advantage by facilitating meaning in and at work.
Statistics abound that illustrate the link between highly engaged, meaning-rich workplaces and top and bottom line results. For example:
- Companies with highly engaged employees demonstrate a three year revenue growth of 20.1 percent, compared to the 8.9 percent their industry peers will average, and generate three year earnings growth three times higher than their industry peers. 4
- In companies where 60 to 70 percent of employees were engaged, average total shareholder’s return (TSR) stood at 24.2 percent; in companies with only 49 to 60 percent of their employees engaged, TSR fell to 9.1 percent; companies with engagement rates below 25 percent suffered negative TSR. 5
- Companies with high sustaining engagement had an average one year operating margin of 27 percent, 2.7 times higher than companies with low engagement levels. 6
- Companies with higher-than-average employee engagement also had 27 percent higher profits, 50 percent higher sales and 50 percent higher customer loyalty. 7
- Companies that land in Fortune’s Best 100 Companies to Work For list are invariably characterized by a multitude of attributes that facilitate meaning in the workplace. A 2011 study showed their stock performed three times better than the S&P 500 between 1997-2011. 8
So the case is clear for the need to become a meaning-making manager. Stay tuned to future Make Work Matter blog entries, and we’ll cover just how to do so. In the meantime, let’s get the discussion flowing – how do you create the competitive advantage that is meaning at your place of work?
1 Cranston, S., & Keller, S., Increasing the Meaning Quotient of Work (January, 2013), McKinsey Quarterly.
2 Schwartz, T., The Twelve Attributes of a Truly Great Place to Work (September 19, 2011), Harvard Business Review Blog Network.
3 Sanford, B., The High Cost of Disengaged Employees (2013), Gallup Business Journal.
4 Staff of the Corporate Executive Board, Involve Your Employees (December 11, 2009), BloombergBusinessweek.com.
5 Kruse, K., Why Employee Engagement? (September 4, 2012), www.forbes.com, citing Employee Engagement at Double Digit Growth Companies, Hewitt Research Brief.
6 Towers Watson Global Workforce Study (2012).
7 Wagner, R. & Harter, James K., The Elements of Great Managing (2006), New York: Gallup Press.
8 Comparative Annualized Stock Market Returns, greatplacetowork.com.