What’s keeping CEOs up at night? It may come as a surprise, but the biggest concerns are not with their own business or even the broader economy. They’re worrying about their people. They know that people will make or break their business success.
Development Dimensions International (DDI), in its brand new 2023 Global Leadership Forecast states, “In the wake of one of the most dramatic workforce reshufflings in history, CEOs are acutely aware of the fragility of their workforce.” On average in the last year, 54% of companies saw their turnover rate increase.
Specifically, the report shares the three top concerns CEOs have:
- Attracting and retaining top talent
- Developing the next generation of leaders
- Maintaining an engaged workforce
If these three concerns resonate with you, you may want to take a good look in the mirror. Because the factor that makes the biggest difference in attraction, retention, and engagement is effective leadership. As the DDI report states, “Ineffective leaders stand out as the number one reason why [other] leaders would want to leave their company within the year. When leaders did not view their company’s [senior] leadership as effective with interpersonal skills, they were 3.5X more likely to indicate they wanted to leave within the year.”
Knowing you need to lead well is one thing, but doing it is another. Unfortunately, the majority of leaders fall into the chasm of the knowing/doing gap. The study found that “only 40% of leaders reported their company to have high-quality leaders – reflecting a 17% drop from just two years ago and the biggest decline in a decade.”
Yet, while the overall current state of leadership may look bleak, there are rays of hope. There is a cadre of leaders that have cracked the leadership code, even in these challenging times. These leaders have bucked the trend of mediocrity, and successfully engage their workforce.
One of these leaders is Ravi Saligram of Newell Brands, a $9 Billion consumer goods conglomerate with numerous iconic brands in its portfolio, including Rubbermaid, Sharpie, and Yankee Candle. Saligram was recruited to Newell and took on the CEO role on October 3, 2019. A week later, he learned the results of the company’s most recent engagement survey. It wasn’t pretty.
The overall company engagement was 45%, which was extremely low compared to industry averages. External consultants advised Saligram that it would take ten years to increase engagement to reach decent norms. Saligram and his leadership team surpassed the consultant’s estimates—-by eight years. In October of 2021, average engagement scores across Newell hit 75% (including 77% engagement within the ranks of their factory employees.)
By all accounts, the leap from 45% to 75% engagement is fantastic. What can the rest of us learn from Newell’s story? Specifically, what did Saligram do to increase engagement levels in a company of 28,000 employees? In sharing his process, there are three things that Saligram did that stand out: Confront the brutal facts, listen in a way that makes people feel safe to speak up, and act on feedback shared to make progress.
1.Confront The Brutal Facts
Jim Collins, in his classic book “Good to Great”, introduces the leadership principle of “Confront the Brutal Facts”. This means taking a cold hard look at the good, the bad, and the ugly. Collins has said, “If we don’t confront the brutal facts, they will confront us.”
For Saligram, confronting the brutal facts started even before he took the job. He began by reading every single Glassdoor review that a Newell employee had ever posted. All 510 of them. Saligram said, “I saw that there were a lot of employees who were disheartened. It touched my heart. Throughout my career, I’ve always believed the secret sauce is people, so it’s important to focus on people first.”
Saligram continued, “In my first town hall, I said ‘Look, if you have a complaint or a problem, don't write in on Glassdoor. Write to me so I can do something about it. Let's all be part of the solution rather than just talk about the problems.’”
After the town hall, Saligram got hundreds of employee notes. He shared, “I replied to each of them, because I want to make sure that I connect with our people. And I still do. Any time an employee writes me, I write back to them myself. They don't have to go through two or three assistants.”
2.Listen In a Way That Makes It Safe to Speak Up
Saligram shared, “Sometimes when you're CEO, good news travels to you at the speed of lightning, but bad news travels very slowly. But, if you have your ears to the ground and talk directly, the lower you go in an organization, the more candid and honest people are. It helps surface issues, and then we can tackle them.”
Since the start of his tenure, Saligram held listening tours at the various Newell sites around the world. He often keeps these small, with no more than fifteen employees. In the sessions, he always asks the same three questions:
- What’s going well?
- What’s not going well?
- If you had my job, what would be one thing you’d do to change the company for the better?
By asking these three powerful questions, Saligram is simultaneously demonstrating empathy, humility, and consistency. In leading by listening, Saligram implicitly shows people that he cares about what they think and feel. This helps promote a psychologically safe culture.
Saligram also knows that in a large company, it’s not enough for just the CEO to model these behaviors. Every single one of the leaders on his executive team does the same thing. They lead town halls and do listening tours. They ask the same three questions. As Saligram explained, “We’re pushing this to every level so that it becomes systemic, and part of our culture.”
3. Act On Feedback Shared to Make Progress
There’s a tragic error that too many leaders make: They ask for feedback, but never do anything with it. That’s actually worse than never having asked for feedback in the first place.
One of the big pieces of feedback that Saligram consistently heard was that Newell Brands suffered from vast amounts of complexity. It was making life difficult for everyone. When he started as CEO, the company had:
- 101,000 different SKUs
- Over 1000 legal entities
- 400 websites in the US alone
- 23 different supply chains
Ridding the company of unnecessary complexity became a top priority. Today, Newell Brands has:
- 27,786 SKUs
- Around 300 legal entities
- 40 websites
- 1 integrated supply chain
When we make things simpler, people viscerally feel as though they’re making greater progress towards their goals. Research from Harvard University has shown that the feeling of progress is the single greatest motivator of human behavior. It’s a fast track to attraction, retention, and engagement.
Years ago, the author Jim Rohn wrote, "Success is neither magical nor mysterious. Success is the natural consequence of consistently applying the basic fundamentals." For leaders, the key words in that phrase are ‘consistently applying’. It’s what separates out the good from the not-so-good. The basics include: Confront the brutal facts. Listen in a way that makes people feel safe to speak up. Act on feedback shared to make progress. It worked for Ravi Saligram and Newell Brands. It can work for you, too.
