Our latest leadership webcast: The Economics of Trust: Connecting Leadership to Business Results

1. INSIGHT EXPERIENCE
www.insight-experience.com
152 Commonwealth Avenue | Concord, MA 01742 | 978-369-0639 | info@insight-experience.com
The Economics of Trust:
Connecting Leadership to Business Results
A webinar from Insight Experience
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2. • Insight Experience helps leading companies
develop leaders and execute strategy
• We create dynamic business simulation and
leadership development experiences that
connect leadership to business results
• We work globally across industries, at all levels of
management, with a focus on Fortune 1,000
clients
About Insight Experience
2

3. Today’s Conversation
3
Review the data
Answer
questions
Give you a tool
Share our
thinking

4. »Worked on a service
excellence initiative for
mid-level managers and
executives
»Modeled the business and
“uncovered” the dynamic
of the Service Profit Chain
Connecting Leadership to Business Results
Our experience and a little history
4
» Engaged to help solve an
employee retention
challenge
»Based on detailed company
metrics, added “people”
drivers with operations and
economic drivers to truly
mirror their business system

5. Leadership creates
shareholder value:
Leadership and Business Results
What’s the data now?
5 SOURCE: Bersin by Deloitte: Global Human Capital Trends 2015
+15.7%
Equity premium on
organizations perceived to
have effective leadership
–19.8%
Equity discount on
organizations perceived to
have ineffective leadership
+15.7%
-19.8%
Leadership, culture and
engagement are now real
business issues:
87%
86%
Culture and
Engagement
Leadership Gaps
PERCENT RATING TREND IMPORTANT

6. Question: Why does engagement matter in your
business?
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7. 28 research studies show a correlation
between employee engagement and:
Employee
Engagement
Service
Sales
Quality
Safety
Retention
Sales,
Profit and
Total
Shareholder
Returns
Why is engagement important?
7 SOURCE: Cited by Kevin Kruse, Forbes

8. • A study of 64
organizations revealed
that organizations with
highly engaged employees
achieve twice the
annual net income of
organizations whose
employees lag behind on
engagement.
The Data is In…
• Study of 23,910 business
units compared top
quartile and bottom
quartile engagement
scores and found that
those in the top quartile
averaged 12% higher
profitability.
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SOURCE: The Impact of Employee
Engagement. Kenexa
SOURCE: Gallup Q12
Meta-Analysis, Gallup

9. Question: What do you believe are the key drivers
of engagement in your organization?
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10. The Flow of Employee Engagement
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SOURCE: Beyond Engagement;
IBM Software technical white paper, 2014
Organizational
Policies and
Practices
Leadership and
Managerial
Behaviors
Engagement
Discretionary
Effort
Higher Team,
Individual and
Organizational
Performance

11. The Flow of Employee Engagement
11
SOURCE: Beyond Engagement;
IBM Software technical white paper, 2014
Organizational
Policies and
Practices
Leadership and
Managerial
Behaviors
Engagement
Discretionary
Effort
Higher Team,
Individual and
Organizational
Performance
Behaviors Reinforcing:
• Confidence and Trust
• Recognition and Respect
• Growth and Development
• Work and Balance

12. In the most engaged organizations,
the areas that scored highest were:**
Drivers of Employee Engagement
12
SOURCES: *Dale Carnegie/MSW Research
**Quantum Workplace; 2013 Employee Engagement Trends Report
Relationship with immediate supervisor
Belief in senior leadership
Pride in working for the company
Employee
Engagement*
1
2
3
Trust in Senior
Leaders
Feeling
Valued
Retention

13. There is zero correlation between the prominence of corporations’
values (as touted online) and the firms’ performance.
Trust and Integrity: the power is with your people
13 SOURCE: The Value of Corporate Culture, Guiso, Spienza, Gonzales, 2013
What matters instead is employees’
assessments of companies’ integrity.
High levels of
perceived integrity
are associated with
PERCEIVED
INTEGRITY
higher
productivity and
profitability.*
PRODUCTIVITY&
PROFITABILITY

14. The economics of Trust and Leadership
14

15. a. 10-30%
b. 30-50%
c. 50-70%
d. 70 90%
e. 90-100%
What percentage of their true potential do
employees utilize each day?
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16. The Business Cycle of Leadership
Business Results
16
Capital&Operating
BudgetDecisions
OrganizationDecisions
How we learned...
Employees
© Insight Experience

17. The Business Cycle of Leadership
Communication
Time
Allocation
Priorities
& Focus
Employee
Performance
How you lead ... … impacts the effectiveness of
the operating decisions
implemented by your team …
17 © Insight Experience

18. The Business Cycle of Leadership
Business Results
Communication
Time
Allocation
Priorities
& Focus
Employee
Performance
How you lead ... … impacts the effectiveness of
the operating decisions
implemented by your team …
… to drive business outcomes
18
Capital&Operating
BudgetDecisions
OrganizationDecisions
© Insight Experience

19. Leaders translate strategy into results
19
Strategy
Business Priorities
& Focus
Organizational Capabilities:
Resources, Talent, Process
Action
Results
DefiningDirection
AligningtheTeam© Insight Experience

20. How Leaders Spend their Time is Critical
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The bulk of manager time is spent
on essential but low impact
management tasks…
… leaving little time for
high-value leadership activities
SOURCE: Workboard.com
• Monitor middle management initiatives
• Deal with administrative matters and emails
• Conduct meetings for operational improvements
SENIOR
• Assign multiple people to the same initiative
• Request frequent progress reports on initiatives
• Review justifications for decisions from below
MIDDLE
• Produce data for reporting
• Seek approval for decisions
• Complete forms and reports
FRONTLINE
• Coach and motivate direct reports
• Communicate the company’s vision and strategy
• Analyze future trends
SENIOR
• Empower frontline managers to stretch themselves
• Set performance goals
• Share best practices across teams
MIDDLE
• Deal with under-performance, reward positive results
• Know each individual personally
• Create and share clear and tangible business targets
FRONTLINE

21. Executive Time Allocation (Current Period)
This title will not show up here
We will update the graphs so the
colors look a little more integrated
(I.e. white background, black
foreground, etc)
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22. Time Managing Operations
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23. Communication: what do your employees
listen for from leaders?
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24. What Do Employees Listen For?
Spirit
Accountability
Strategic
Alignment
ConsistencyStakeholders
24 © Insight Experience

25. What Do Employees Listen For?
Spirit
Accountability
Strategic
Alignment
ConsistencyStakeholders
WHAT IS OUR
STRATEGY?
Where are we headed?
How does our work connect
to the bigger picture?
How does our work support
the strategy?
25 © Insight Experience

26. What Do Employees Listen For?
Spirit
Accountability
Strategic
Alignment
ConsistencyStakeholders
WHAT IS EXPECTED OF US?
What are our goals?
What do you want us to do?
Am I being held accountable
to results?
26 © Insight Experience
WHAT IS OUR
STRATEGY?
Where are we headed?
How does our work connect
to the bigger picture?
How does our work support
the strategy?

27. What Do Employees Listen For?
Spirit
Accountability
Strategic
Alignment
ConsistencyStakeholders
ARE WE MOTIVATED BY
WHAT WE HEAR?
What is the tone of the
message?
Have we been recognized
for our efforts?
Is the message exciting
and engaging?
WHAT IS EXPECTED OF US?
What are our goals?
What do you want us to do?
Am I being held accountable
to results?
27 © Insight Experience
WHAT IS OUR
STRATEGY?
Where are we headed?
How does our work connect
to the bigger picture?
How does our work support
the strategy?

28. What Do Employees Listen For?
Spirit
Accountability
Strategic
Alignment
ConsistencyStakeholders
IS WHAT I’M HEARING…?
Consistent with our business
objectives?
Consistent over time?
Consistent with what others
are being told?
ARE WE MOTIVATED BY
WHAT WE HEAR?
What is the tone of the
message?
Have we been recognized
for our efforts?
Is the message exciting
and engaging?
WHAT IS EXPECTED OF US?
What are our goals?
What do you want us to do?
Am I being held accountable
to results?
28 © Insight Experience
WHAT IS OUR
STRATEGY?
Where are we headed?
How does our work connect
to the bigger picture?
How does our work support
the strategy?

29. The data shows that the vast majority of leaders
are not engaging in crucial moments that could
help employees see them as trustworthy, despite
companies’ vast expenditures on reorganizations
and change initiatives.
The Key Leadership Levers at work
29 SOURCE: The Top Complaints from Employees About Their Leaders

30. The Business Cycle of Leadership
Communication
Time
Allocation
Priorities
& Focus
Performance
How you lead ... … impacts the effectiveness of
the operating decisions
implemented by your team …
30 © Insight Experience
Skill
Morale
Trust
Employee
Engagement

31. The Unique Dynamics of Trust
• Trust’s power lies with the giver
• Trust has no value until given away
• It takes a long time to build, but an instant to destroy
When
trust isHIGH
it multiplies the
GOOD
BAD
and filters the
When
trust isLOW
it multiplies the
BAD
GOOD
and filters the

32. Dynamics of Trust: How Employees React
32
HIGH TRUST LOW TRUST
Make Good
Decisions/
Do the Right Thing
Make a Mistake/
Do the Wrong
Thing

33. Dynamics of Trust: How Employees React
33
HIGH TRUST LOW TRUST
Make Good
Decisions/
Do the Right Thing
• Reinforces Positive
Cycle
• Builds trust
• Positive feedback
• Get Feedback
• Action
Make a Mistake/
Do the Wrong
Thing

34. Dynamics of Trust: How Employees React
34
HIGH TRUST LOW TRUST
Make Good
Decisions/
Do the Right Thing
• Reinforces Positive
Cycle
• Builds trust
• Positive feedback
• Get Feedback
• Action
Make a Mistake/
Do the Wrong
Thing
• Get the benefit of
the doubt
• Assume good intent
• Get feedback

35. Dynamics of Trust: How Employees React
35
HIGH TRUST LOW TRUST
Make Good
Decisions/
Do the Right Thing
• Reinforces Positive
Cycle
• Builds trust
• Positive feedback
• Get Feedback
• Action
• Suspicious
• Wait for “the truth”
to emerge
• No Feedback
• Inaction
Make a Mistake/
Do the Wrong
Thing
• Get the benefit of
the doubt
• Assume good intent
• Get feedback

36. Dynamics of Trust: How Employees React
36
HIGH TRUST LOW TRUST
Make Good
Decisions/
Do the Right Thing
• Reinforces Positive
Cycle
• Builds trust
• Positive feedback
• Get Feedback
• Action
• Suspicious
• Wait for “the truth”
to emerge
• No Feedback
• Inaction
Make a Mistake/
Do the Wrong
Thing
• Get the benefit of
the doubt
• Assume good intent
• Get feedback
• What I expected…
• Confirms my belief
• Status Quo
• No Feedback
• Inaction

37. The Business Cycle of Leadership
Business Results
Communication
Time
Allocation
Priorities
& Focus
Employee
Performance
How you lead ... … impacts the effectiveness of
the operating decisions
implemented by your team …
… to drive business outcomes
37
Capital&Operating
BudgetDecisions
OrganizationDecisions
© Insight Experience

38. The Business Cycle of Leadership
Perspectives
&
Information
Culture
38
Business Results
Communication
Time
Allocation
Priorities
& Focus
Employee
Performance
How you lead ... … impacts the effectiveness of
the operating decisions
implemented by your team …
… to drive business outcomes
Capital&Operating
BudgetDecisions
OrganizationDecisions
© Insight Experience

39. The Good
Leadership, Trust and Results
39
The UglyThe Bad

40. 40
So, What was your Number?

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www.insight-experience.com
152 Commonwealth Avenue
Concord, MA 01742
978-369-0639
INSIGHT EXPERIENCE
info@insight-experience.com
@InsightXP