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The Secret of Employee Engagement

In “Manage by Context, not Control” I gave a long introductory premise explaining how the work paradigm has shifted. (If you haven’t read it yet, I would recommend giving that a read first as it instills some ground rules that will come in handy not only here but also in upcoming essays.) Specifically, I talked about how modern workers are not interchangeable anymore in terms of their skill level. Instead, they are increasingly specialized. As the world transitions to one of knowledge workers, skillsets are less interchangeable and way more specialized than ever before.

People are the single most important asset in modern organizations. As talent scarcity is increasingly becoming one of the hardest problems, the ability to assess, recruit, manage and retain talent is going to be an invaluable skill.

To overcome talent scarcity more and more companies are adopting one or moreremote work frameworks, and with physical proximity out of the equation, the available talent pool is certainly way bigger. As more companies are beginning to embrace remote work, recruitment will get easier, but my hypothesis is that retaining talent will get considerably harder.

Generally speaking, a remote environment removes friction. While this lack of friction comes with a lot of well-known benefits (competitive salary, flexible working hours, better individual time allocation, etc.), it also means that changing jobs will get easier and consequently, the ability to retain talent will matter a whole lot more in the future than it does today.

In this essay, we’re going to get acquainted with the prevailing wisdom on motivating and retaining employees, see if it’s still relevant, and arrive at some meaningful conclusions.

On to the write-up.

What is Effective Employee Engagement?

When it comes down to motivating and retaining employees there are two words that have been used by HR departments for years. Those words are “employee engagement.” Run a google search for “employee engagement,” and you’ll see what I mean.

Results showing what people think is employees engagement

To quote one definition:

Employee engagement represents the levels of enthusiasm and connection employees have with their organization. It’s a measure of how motivated people are to put in extra effort for their organization, and a sign of how committed they are to staying there.

I’ll spare you the extensive clicking; here’s how the thinking goes for most of them: “Employee engagement" leads to "job satisfaction" and "employee happiness," and these then lead to “higher motivation and performance,” and eventually, “better results.”

The basic assumption is that engaged employees deliver high-quality performance and this begs the question, how do we “engage” employees? The answer is spend a lot of money on frequent/big HR initiatives, sponsored group activities, celebrations to build camaraderie and make sure people have fun, and, for employees who are struggling, performance improvement plans.

The idea is well-intentioned but fundamentally flawed, as too often “employee engagement" is treated like the end-game, rather than serving customers and getting results. For years, companies have been optimizing for what is – to some extent – a bad proxy, completely losing sight of the real target over time.

The job of management is not just about building loyalty, retention and career progression, and about implementing structures to ensure employee engagement and happiness. As obvious as it may sound, people don't need to be entertained at work to stay motivated, aligned or to really throw themselves into their work. The job of a great leader is not to entertain people, but to ensure that all team members are high performers who do amazing work and challenge one another.

The actual questions are: How can leaders motivate people? What’s the actual driver for individual motivations? And what actually encourages alignment and enables the best individual work?

The answer is clear and continuous communication about thecontext of the work to be done.

In practice, this means telling people: "Here's exactly where we are and here's what we are trying to accomplish." Employees at all levels want and need to understand not only the particular work they're assigned, but also the larger story of the way the business works, the challenges the company faces and the competitive landscape.

People need context to really do their best work.

What are the individual responsibilities versus the actual surrounding context

The more management time is spent on clearly communicating the context of the work to be done, the fewer the necessary policies, approvals, and incentives. On the other hand, the more an organization spends on planning employee engagement initiatives, the more this reveals about their fundamental internal flaws.

Truly understanding how the business works is the most valuable kind of learning – much more productive and appealing than "employee development" training – yet, this happens to be the most neglected area.

Rather than focusing on this:

Image to show how employees aren't interested in the what

Focus on this:

Image to show how employees aren't interested in the why and broader scope of their actions

Don’t ask, “How can we keep employees engaged?” A much better question is, “How can we create this context in which the work is to be done and make sure everyone is regularly exposed to it?”

What does it mean to create context about the work to be done? At its core, there are a handful of fundamental ingredients: the message (what you are going to tell people), the firehose (how you are going to distribute that message), and the rhythm (how often you’re going to do it).

Find the Message

The message is the fundamental building block, and it’s not what you say, it’s what people understand. It’s what people read and actually comprehend. It’s the inner voice that over time people start to hear in the back of their minds.

Image to show how leadership should take care of internal communication

InUnderstanding Media of Internal Communication, I described the difference between hot and cold messages. In hot messages, information is transmitted in high definition; the meaning of what’s being communicated is right in your face. Because there is no guesswork (the hard work has been done upfront by the presenter), they tend to be all-encompassing and require low participation. Conversely, in cold messages a lot is left unsaid, a lot of guesswork is required in order to read between the lines, and the reader has to fill in the gaps. They have low engagement, but high participation.

Meaningful context is built through hot messages: high-resolution information where nothing is left unsaid, the meaning is clear and the guesswork is reduced to a minimum.

Back to the initial premise: how one can go about deciding what needs to be communicated to create context.

There’s no single recipe for understanding what the content of your messages should be. One way to understand it is to identify the knowledge gaps. In other words, to understand what matters most to you and your business and on what scale people are aware of it.

Your content should focus both on the missing gaps and the reinforcement of what people already know.

Good assessment of these gaps varies from organization to organization. As a rule of thumb, you can get an initial picture with these questions:

  1. How well do you think people throughout the company could describe its business model?
  2. Do you share with your employees the same information presented in the earnings call? How frequently do you share your company P&L? Where are they likely to get data about how your company stacks up against the competition?
  3. Is everyone aware of the difficult challenges your company faces? Have you asked them their thoughts about how to meet those challenges? Do you have a disciplined process for disseminating information and discussing challenges?
  4. What area of your business do you think your people know little to nothing about? Could you ask a leader in the domain to communicate with the team? Are there any other ways you could facilitate communication between the groups?
  5. How well do you think your people understand who the customer is and what their needs and desires are? Do you regularly share customer research? Do you facilitate your team spending more time with your customers?
  6. If you were going to hold an off-site, what is the most pressing issue you would want your people to learn about and debate? How could you provide the richest possible presentation of that information?
  7. What existing meetings or forums could be used to carve out dedicated time for communicating more about the business context? Do you regularly review any such meetings to be sure they are still effective? Do you regularly review and audit internal communication? Do you set different agendas for different kinds of communication (weekly stand-up vs. All-hands)?

Find the Medium

Once you’ve identified the information gaps and developed the storylines, you need a way to distribute the information. This is particularly important because the firehose (medium) you choose eventually molds the content and, depending on its shape, the nature of the information changes.

The basic assumption is: cold media create spaces for cold messages, and hot media create spaces for hot messages. In order to distribute high-resolution messages, you need to look for hot media. Specifically, you need to look for those which:

1. Push the envelope of high-resolution information

Common wisdom sees written text as the status quo for high-resolution messages. Whether an important email, a new piece of documentation, a protocol update, a leadership message or a simple chat message, everything goes through written words.

Written texts have the power to be read in any circumstance but they lack the ability to create an inner private world where you know people have your full attention. Audio messages on the other hand have the unique ability to recreate a personal environment: a private space, just for the two of you.

Since mobile phones and the internet put anybody in the world in our pocket, and headphones then completed the distance, asynchronous audio messages become a more effective way to communicate in high definition. Audio can be used not only for content that touches important issues and requires more personal intimacy, but also for more ordinary issues that without the para-verbal components could be misinterpreted.

Moreover, the rise of streaming audio (music, podcasts, audiobooks, internet radio) has already made audio-first content a huge part of people’s daily habits. Having a way to distribute important messages through a direct voice to people’s heads is tremendous leverage, which today feels a bit underappreciated. Yet, very few organizations are capitalizing on this.

Image to show how leadership can use media di better communicate internally

When looking to distribute high-resolution content, look for media that can let you go the extra mile.

2. Privilege both speed and coverage of information

Speed is how fast a message is able to propagate throughout a system, and coverage is how many people that message is able to reach. You want to make sure people read your content in a timely manner (high speed), and at the same time, you want to make sure nobody is left behind (high coverage).

Real-time chat tools like Slack are designed to facilitate rapid information flow (high speed), but at the expense of a poor reach (low coverage). Email, on the other hand, acts in the exact opposite fashion.

Image to show Slack vs Email and where the ideal solution is

When picking a medium, think carefully about the compromise (velocity vs coverage) you’re making.

3. Feature high signal/noise

Our attention and comprehension are where information “happens”. Avoid cluttered and overused media where information is already flowing in high-quantity. The chances of your message getting the right level of attention are very low.‍

4. Provide analytics

Search for products that have built-in analytics. While this might sound obvious, most of them don’t have mechanisms in place to let you understand how fast/slow your message has been read or (most importantly) by how many people.

Why feedback loops are fundamental to improve internal communication

Specifically, look for media that provide:

  1. Data about how people engage with your message (skimming vs. deep-read)
  2. Data about how fast they receive the message (low vs. fast distribution)
  3. Data about how many actually read your message (low vs. high coverage)
  4. Aggregated data over time about how the organization is consuming content
  5. Aggregated data over time about how the organization is producing content

Find the Rhythm

At this point, you should bear in mind what type of content (messages) you need to talk about and how it’s going to be distributed (the medium).

Those two aren’t enough if you don’t develop what I call a strong heartbeat of communication. Working out how to do this — and, for company leaders and HR executives, coaching all managers to do it consistently and continuously, takes a lot of time. Finding an organization pace, not only means finding a rhythm regarding the creation/distribution of information, but also letting people create personal habits of information consumption over time.

Establishing a strong heartbeat of communication starts with these two things:

1. You need an owner

The owner establishes the pace and oversees its execution, making sure the entire company is following it regularly. Depending on the company size and its culture, this role may change considerably. In some organizations, the CEO directly handles important communication. In others, there’s a head of internal communication or Chief of Staff who acts as air traffic control for high-resolution communication.

2. Find Directly Responsible Individuals (DRI)

From sales and customer service to product and engineering teams, each department should have a DRI responsible for delivering updates, keeping not just their own people, but the entire company up-to-date on what’s going on in their team, as well as broader issues that everyone should be aware of.

The rhythm is such an essential detail because as both business and the context of the work to be done to keep changing, so should the messages. Pulling the same messages and showing them over and over is not effective. You’ve got to constantly monitor the messages and update them as soon as the circumstances change. A strong heartbeat ensures that the organization is always informed by the latest and most important information.

Measure, measure, measure

How do you ensure things are constantly improving over time? You need a systematic way to measure what’s happening. That’s where you close the feedback loop. While it may sound obvious in retrospect, not many businesses are measuring how they’re communicating and how well their approach is working.

To understand what’s working and what’s not working, you need to get both:

- Qualitative feedback: collect employee memos to precisely understand how things could be improved.

- Quantitative feedback: measure data on how people interact with your messages; how many of them actually read it, how relevant the information is, how often do they check it etc.

Create a Positive Feedback Loop

If you execute the above steps correctly you end up creating a positive feedback loop where the more you communicate, the better context you deliver to your team and the more people actually understand their impact and feel emotionally attached to the company and its mission.

Loops are powerful because they aren’t one-shot initiatives, they compound over time, eventually turning your strengths into an actual competitive advantage.

Expanded feedback loop to show how you can improve internal communication

Truly empowering people to learn how your business works and what the broader context of their contributions is makes for the most valuable learning and the most effective form of “employee engagement”.

Not big HR initiatives or sponsored group activities, but simple, clear, continuous communication about the context of the work to be done is the first step in creating a high-output organization and retaining your best talents.

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