Discovering the Elements of Great Managing

H.L. Mencken once wrote, "There is always a well-known solution to every human problem -- neat, plausible, and wrong." A dispiriting thought, to be sure. It would be so much easier to think that there's one pat answer, or a single silver bullet, that could solve every problem.

Forget it. Mencken was right. There isn't a neat, simple solution to any human problem, let alone the problems of managing humans. That's because business is an intricate dynamic, involving different people doing disparate things to achieve many goals. And if finding a single answer to the problems of people management is difficult, it's futile to think there's a single element that will make that complex dynamic perform at peak.

The fact is, there are 12 of them.

Rather, there are 12 basic needs that all humans need fulfilled at work. They include knowing what's expected of you, receiving recognition and praise for doing a good job, and believing that your opinions count. When those needs are met, the company benefits from dramatically increased employee engagement and organizational performance. So say Gallup's Rodd Wagner and Jim Harter, Ph.D., in their book 12: The Elements of Great Managing.

12 -- the sequel to the 1999 bestseller First, Break All the Rules -- is based on decades of Gallup research, including interviews with more than 10 million managers and employees spanning 114 countries and conducted in 41 languages. 12 explores each of the elements and shows how companies create and sustain employee engagement through profiles of great managers in industries as varied as retail, manufacturing, hospitality, healthcare, and agriculture. (See "The 12 Elements of Great Managing" at the end of this article.)

But how does it work? What are the 12 elements? What do they have to do with engagement, and why does engagement affect a company so much? In this interview, the authors of 12 explain some of their findings, including why human nature will always win, why legislating processes dooms the outcome, and why praising employees yields such high profits.

GMJ: The book is called 12: The Elements of Great Managing. Why elements, and not edicts or laws -- something more concrete?

Rodd Wagner: The choice of the word element was intentional. The 12 elements are interdependent; none of them stands alone, and you can't create a highly profitable, productive, safe, customer-engaging workplace by focusing on just one. Instead, the elements of great managing come together to create an engaging workplace. The more of these elements you put together, the greater the compound you create, and the better it holds together.

Each of these elements predicts superior performance in an individual, in a workgroup, or ultimately -- if you have enough engagement -- in the company itself.

James K. Harter, Ph.D.: Each of these elements predicts superior performance in an individual, in a workgroup or ultimately -- if you have enough engagement -- in the company itself. And the 12 items we ask to assess employee engagement pass an empirical hurdle that hundreds of other items haven't. Saying the 12 items predict performance means that there's something about human nature, some pattern to what it means to be human in the workplace, that that particular item speaks to. And that's the part that I find fascinating: For some reason, those 12 elements do a pretty comprehensive job of describing what it means to be human at work.

GMJ: Why should managers know about the elements?

Harter: Because they predict performance. Workgroups that score higher on each of those 12 items tend to have higher performance.

Engagement isn't everything; marketing initiatives and product offerings, for instance, have a big impact, too. But in a highly competitive world, having your employees behind you is an important differentiator.

Wagner: Engagement has the greatest payoff or greatest incremental effect on profitability. Many things affect profitability, and many of them are outside the control of the firm. Airlines get hit by higher fuel costs; companies can be affected by weather; competitors take actions that catch your company unaware. But there are long-term strategic issues that are within the company's control, and employee engagement is one of the determinants of profitability that companies can really affect.

GMJ: You mention emotions constantly in the book -- in fact, you say that between human nature and company policy, human nature will always win. What part does emotion play at work?

Wagner: There seems to be a bit of a dichotomy out there. You will hear comments to the effect that "our people are our greatest asset" or "this team is going to win" that suggest that a company understands how human nature can help them. On the other hand, in many cases there is an implicit antagonism toward human nature: that it needs to be harnessed, or legislated, or restricted and remolded, because if people are left to themselves, they'll do things that won't advance the company.

Harter: Yet when you delve into human nature, there's an awful lot that helps a company. People want to learn and grow, and to the degree that the company helps them do that, then they help the company.

People respond to praise and recognition. People enjoy having the opportunity to do the things that match their talents, and they get an intrinsic motivation and reward out of doing things that help the company. People reciprocate if they find friendships and support and encouragement at work. There's an awful lot about human nature that helps companies, yet there is skepticism about human nature from a lot of executives, and from a lot of managers.

GMJ: Why is that?

Wagner: I think it's because people are messy, and it seems messy and difficult to have to cater to people's emotions, because they seem unpredictable. But when we study great managers, it seems easy to them. They have a sincere approach to management -- they're really in it for the people they manage. And for them, that makes it a lot easier than you might think.

GMJ: You studied managers in 114 countries. Why don't cultural differences contradict your findings on workplace engagement?

People are messy, and it seems messy and difficult to have to cater to people's emotions, because they seem unpredictable.

Harter: We saw some differences in how people respond to things; for example, how people respond to recognition differs according to the cultural norms and expectations in every country. But when you get down to what it takes to manage a worker, human beings are human beings. We found, even statistically, that how these elements sort workgroups -- from productive to unproductive -- is consistent across cultures.

Wagner: There are great cultural differences, but not necessarily differences in human nature. We're not all that far separated from each other in the things that make us react or that motivate us. It was interesting to see how people attribute things to their local culture that other people in other places would attribute to their local culture, but what they were really talking about was human nature.

GMJ: In the book, you say that paying people to execute a process instead of reaching an outcome is counterproductive. Can you explain that bit?

Harter: People want to make a difference and want to make an impact on the organization, but each person may have a different way of getting there. The best managers we studied help employees focus on the outcomes that are most important, then allow them to figure out the best way to get there.

Managers who try to legislate each step end up with workers who feel controlled and diminished, because they aren't able to put themselves into the job -- they're basically being told what to do. And if you pay for process, you may not reach the goal, because the process becomes the goal. You also remove the employee's judgment and creativity, which might have helped get to the end result in a better way.

GMJ: Is it judgment or creativity that creates better processes, or both?

Wagner: Both. Companies always want their employees to take psychological ownership, to treat the company as though they owned it. Well, the real owner doesn't have to follow a manual, and the real owner gets to decide how best to take care of customers. Executives find themselves surprised that their employees aren't taking psychological ownership. Employees can't if their behavior is closely legislated.

GMJ: But I've heard executives say things like "I can't trust these people to run the cash register. How can I trust them to speak politely to a customer?"

Wagner: Then they've hired the wrong people.

If you shackle employees with processes, you have handicapped them. You have to trust them, or you should get different people.

Harter: Or they haven't really listened to their people. Or maybe both.

Wagner: You have to trust employees, because they are the interaction between the company and the customer. You've put them on that cash register, you've put them in the aisle of the retail store, you have entrusted them with the customer. So if you then shackle them with processes, you have handicapped them. You have to trust them, or you should get different people.

GMJ: One of the elements is recognition -- that people need to be recognized for doing good work. Why is praise so important?

Wagner: One of the most pernicious thoughts out there is that paying people is praise enough. That runs quite contrary to everything we know about how humans learn and how behavior is reinforced.

People need that little dopamine surge that comes with recognition, that little tingle of excitement, fairly frequently. It's how we make sense of our world. In fact, people who don't have the proper mechanisms to release dopamine, such as people with Parkinson's disease, don't learn as quickly. Getting that little zing makes you want to do that thing again. When companies don't reinforce employees when they're doing the right thing, the employees' brains say "There's nothing here, so let's move on and do something else." [See "In Praise of Praising Your Employees" in the "See Also" area on this page.]

GMJ: What are the financial benefits of praising employees?

Wagner: First, it doesn't cost that much. Research by Jim [Harter] and other scientists found that employees don't necessarily need a plaque or a trophy or something hugely expensive -- unexpected words of praise are quite powerful. They don't cost anything, and people are then motivated to do the things that the company needs them to do, again and again. You can't buy recognition.

GMJ: Do you have to keep upping the ante with praise -- a pat on the back, then a plaque, then a dinner? Or do people just need a steady drip of dopamine?

Harter: It depends on the person. Some want recognition in front of a group, while others are terrified by that. It's up to the manager to listen to each person to find out what's right for him or her, while thinking about what high performance is for that person.

But managers have failed much more often, not on giving too much recognition, but on giving too little. The ratio of positive to negative interactions needs to be high, about 5 to 1. If you get beyond 13 to 1, it may seem a little Pollyanna-ish, but no one ever does get to that level. [See "The Big Impact of Small Interactions" in the "See Also" area on this page.]

One of the things that bugs me is when managers ask someone else what their employees want: "What's the praise I ought to give my employees?" Ask them what's meaningful to them. Buy them a cup of coffee and ask them, because they will tell you.

-- Interviewed by Jennifer Robison