Gallup Publishes Long-Awaited Follow-Up to Bestselling Management Book

More than a decade ago, The Gallup Organization combed through its database of more than a million people to figure out what the world's best managers did differently. What emerged was First, Break All the Rules, a New York Times bestseller with a million copies in print. The book, which challenged prevailing business wisdom, first identified the 12 Elements that all great managers share.

Now, Gallup brings readers the long-awaited follow up -- 12: The Elements of Great Managing by Rodd Wagner, a principal at Gallup, and James K. Harter, Ph.D., chief scientist for Gallup's international workplace management practice. 12 paints a compelling and vivid portrait of real-life managers as they harness employee engagement to save a failing call center, turn around a hotel's finances, improve care at a hospital for sick kids, build a better car, and maintain a factory's production while battling power outages. The book also addresses what the authors call "an element unto itself" -- the problem of pay, which explains why higher salaries don't always mean better work.

The new book draws on the famed Gallup data bank, which has grown tenfold since the publication of First, Break All the Rules. Along with the data, Wagner and Harter use the latest insights from brain-imaging studies, genetics, psychology, behavioral economics, and other scientific disciplines to reveal what drives good managers. They also packed their bags and hit the road, traveling from a fiberglass factory in Brazil to a sporting goods store in West Virginia; from an automotive design facility in India to a hotel in Dallas; from a paper making plant in Poland to an international grocery distributor in Brussels. The stories they tell of the problems, pain, struggles, and ultimate triumphs of everyday managers around the globe will forever change the way you think about work.

"Ultimately," say Wagner and Harter, "what emerged are the 12 elements of work life that define the unwritten social contract between employee and employer. Through their answers to the dozen most important questions and their daily actions that affected performance, the workers were saying, 'If you do these things for us, we will do what the company needs of us.'"

Cogent, compelling, and full of personal and professional insight into human behavior, 12 is poised to become the definitive manual for today's frontline managers.

The Data and Findings

Gallup has spent millions of dollars and as many hours researching, compiling, and analyzing the data that go into their books. 12 is no exception. Here are just some of the numbers that explain why, as the authors write, "The creation and maintenance of high employee engagement, as one of the few determinants of profitability largely within a company's control, is one of the most crucial imperatives of any successful organization."

• The digital vault that Gallup drew from to create the book included 10 million sets of responses to the 12 items at the core of 12.
  
  
• The 12 Elements are measured in 41 languages and 114 countries in industries as varied as electric utilities, retail stores, restaurants, hotels, hospitals, paper mills, government agencies, banks, newspapers, as well as dozens of others.
  
  
• Among the publicly traded companies in the database, the more engaged organizations outperformed the earnings-per-share of their competitors by 18%, and over time, progressed at a faster rate than their industry peers.
  
  
• In the companies that are better places to work, millions of small actions -- statistically insignificant in isolation -- created higher customer scores, reduced absenteeism, led to fewer accidents, boosted productivity, and increased creativity, accumulating to make a more profitable enterprise.
  
  
• Engaged employees average 27% less absenteeism than those who are actively disengaged. In a typical 10,000-person company, absenteeism from disengagement costs the business about 5,000 lost days, or about $600,000, annually.
  
  
• Business units with many actively disengaged workers experience 31% to 51% more turnover than those with many engaged employees.
  
  
• Disengagement-driven turnover costs businesses millions of dollars every year. Replacing an entry-level or frontline employee costs 25% to 80% of that person's annual wage. Replacing an engineer, a nurse, a salesperson, or other specialist costs between 75% to 400% of his or her annual salary.
  
  
• Unfortunately, some employees steal. Retailers call it "shrink," an overly cute term for what is essentially outright theft. Workgroups with an inordinately high number of disengaged workers lose 51% more inventory to "shrink" than do those with a higher number of engaged workers.
  
  
• To the outsider, the most obvious connection between employee engagement and the way a business operates is its customer service. Although much of a customer's experience is outside associates' control, being in the higher range of team engagement (feeling a close connection with your workgroup or team) equates to 12% higher customer service scores than those in the bottom tier of team engagement.
  
  
• The various effects of engagement on absenteeism, turnover, accidents, shrink, and customer service combine to create an appreciable competitive advantage for a charged-up team. Highly engaged teams average 18% higher productivity and 12% higher profitability than disengaged teams.

About the Authors

Rodd Wagner is a principal of The Gallup Organization. Upon joining the company in 1999, he gravitated toward the study of high-performing managers and how human nature affects business strategy. At Gallup, Wagner interprets employee engagement and business performance data for many Fortune 500 companies. Wagner was formerly the research director for the Portland Press Herald and Maine Sunday Telegram, a reporter and news editor for The Salt Lake Tribune, and a radio talk show host. He received an M.B.A. degree from the University of Utah Graduate School of Business. Wagner, his wife Nora, and their three children live near Minneapolis.

James K. Harter, Ph.D., is chief scientist for The Gallup Organization's international workplace management practice. He has authored or coauthored more than 1,000 research studies for profit and non-profit organizations. Some of this research has been popularized in the business bestsellers First, Break All the Rules and How Full Is Your Bucket? and in academic articles, book chapters, and publications such as USA Today, The Wall Street Journal, and The New York Times. He is coauthor of "Manage Your Human Sigma," published in the Harvard Business Review. Harter has worked for The Gallup Organization since 1985 and lives in Omaha, Nebraska, with his wife RaLinda and their two sons.

12 Questions for the authors of 12, Rodd Wagner and James K. Harter, Ph.D.

Q: Was there a compelling problem or concern that motivated you to write 12?

A: Absolutely. After the 12 key Gallup statements were published in First, Break All the Rules, people asked us two questions: Why do the answers to these 12 statements predict workgroup performance? Can you give us an example of how a great manager would address each element? We wrote this book to answer those questions.

Q: The book is a follow-up to the highly successful Gallup book First, Break All the Rules, which now has a million copies in print. Why was it time for a follow-up?

A: The first chapter of First, Break All the Rules identified the 12 Elements that came from our study of 1 million employees. The statements were published there, revealing what separates great managers from others, but not why each element is importantor how great managers get their work done.

12, therefore, is a logical follow-up, particularly given how many people were asking for this kind of book. Since 1999, the Gallup global employee engagement database has grown from 1 million to 10 million interviews. The original analyses have been repeated, refined, and yielded many new insights. The company case studies have multiplied dramatically. And there have been tremendous strides in brain research that shed light on just why employees think the way they do.

Q: Did you have any concerns about writing the follow-up to such a successful book?

A: Not at all. First, Break All the Rules gives us a fantastic platform from which to take the science further and provides a huge audience of managers and executives who are interested in how to take employee engagement to another level. We found some incredibly rich veins of research and frontline manager stories that had barely been tapped. The time between the publication of First, Break All the Rules and this book gave us the opportunity to track the progress of many managers and companies, revealing some fascinating stories.

Q: What surprised you most in doing the research for the book?

A: We were surprised by just how much depth underpins the concepts embedded in the 12 Elements. In addition to the stories of managers from different companies who handled different problems while following similar principles, we were surprised by how much related research had been done in vastly disparate fields. As we pulled information from primate research, behavioral economics, neuron-imaging studies, and many other sources, it was fascinating to see how well the research provided explanations for the connections we find between the 12 Elements and company performance.

Q:12 is based on 10 million workplace interviews. Tell us more about that research -- when it took place and how it was pulled together for the book.

A: Successful individuals, workgroups, managers, and organizations have been the source of Gallup scientific study for decades. The 12 Elements were drawn from this rich history of study. The Gallup database is like a living, breathing creature. It grows every day as employees phone in or log in from around the world. Each time we conduct a study for a company, we also request all the data they can give us about the performance of their employees and workgroups. At regular intervals, one of our analysts retrieves the data for a company, an industry, or everyone we interviewed in the past three years to look for the crucial patterns in the data. The database now includes 12 Elements responses from employees in 114 countries and in 41 different languages.

Q: It strikes me that for all of its numbers and statistics, 12 is really a book about people -- great managers and the people who work for them. How did you decide which people to profile out of the millions who were questioned?

A: We used the engagement data to create lists of managers who were candidates to be profiled on each element. Then we sent that list to our offices around the world, asking, "What do you know about this manager? What's the story behind these high numbers?" In the end, we chose managers who had highly engaged teams, evidence of high performance, and stories that were most interesting and insightful. It is important to point out that the managers we profile in 12 are not freaks of managerial nature. Rather, they are managers the likes of which you may find in any company and in any country.

Q: In researching the book, you traveled to a number of countries and companies. Can you tell us a little bit about that?

A: There are things you learn by being there that cannot be conveyed in an initial telephone interview. Once we knew we had a manager likely to make it into the book, we packed up and hit the road. That was fascinating on two levels. The two of us had studied this phenomenon for so many years, and it was quite a thrill to see it in action in such varied settings.

It was also great fun to try to get to so much of the world on a tight schedule, like a Gallup version of TV's The Amazing Race. We have always worked well together, but never more so than on our high-speed trip to Wales, continental Europe, and India. For example, we discovered that Rodd is better at driving in England and Wales on the left side of the road, while Jim is far superior on the German Autobahn. If we'd reversed roles, there's a good chance we would have been killed in a nasty accident.

Q: Of the 12 managers profiled in the book, is there one or two whose story will resonate most clearly for readers?

A: Some stories will have more meaning than others for individual readers, but we suspect it will depend on the reader's situation. In talking with people who have read the book, we've learned that different people gravitate to different managers, perhaps based on their own unique personalities or the challenges they are facing.

If someone is struggling with how to inject more recognition and praise into a team, for example, Elżbieta Górska-Kołodziejczyk's story from Kwidzyn, Poland, will resonate most strongly. If someone is working to understand how materials and equipment affect employee motivation, Enio Wetten's story from Rio Claro, Brazil, might mean the most.

We can't say there's one story that's our favorite. Each is a great manager, and we would feel privileged to work for any of them.

Q: What is the biggest problem facing managers today?

A: There are actually two primary problems facing managers. First is the idea that almost anyone can be a manager, when in fact, it requires certain talents and really ought to be viewed as a specialty. This view often puts the wrong people in management jobs and creates too little focus on improving the quality of managing.

Second is the contempt for what are sometimes dismissively called the "soft skills" of working with people compared with the "hard skills" of understanding numbers and processes. Great managers are incredibly perceptive about human nature. It's a rare and typically undervalued ability.

Q: If managers lack a single resource in helping them improve their performance and the performance of their employees, what would it be?

A: Some of the friends and acquaintances we asked to critique the rough manuscript were successful executives who, after they read it, said, "I wish I'd had this book twenty years ago." They told us how they were thrown into the job of being a manager with very little preparation and often without a clear understanding of how their work affected their team.

The single best resource for a manager is his or her own great manager. That pattern came through loud and clear in our research studies and observations during field work.

Q: What do you think most people will take away from 12?

A: 12 is first about priorities -- helping people understand that there are, in fact, just 12 make-or-break elements that define a great job and a great manager. Given how much gets thrown at managers these days, that clarity is quite valuable.

Once you examine those 12 Elements closely, you realize a crucial truth we discuss in the book -- that in the battle between human nature and company policy, human nature always wins. People were neither created to fit corporate structures, nor have they evolved to do so. Rather than contest this reality, the most successful managers harness the drive, virtuosity, and spirit that come with employing humans, even as they understand the inevitable chinks in their armor. 12 is a book about getting the job done by capitalizing on, rather than fighting against, human nature.

Q: And if you could have managers take away just one message from the book, what would it be?

A: We personally hope they gain an understanding of how much they affect the lives of their employees and the future of their companies. We hope when they finish the last page, they charge forward with a renewed determination to be better managers.