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DESIGNING YOUR COMPANY’S SOCIAL ARCHITECTUREFIVE STEPS TO BUILD A CULTURE OF RECOGNITION ACROSS BORDERS

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hOw TO BUILD A CULTURE OF RECOGNITION

In today’s work environment where people spend more time with their work colleagues than with friends and family, the organization they work for is a significant part of their social fabric. In any situa-tion where people are grouped together to achieve a purpose, indi-viduals want to know they belong. Further, they want to know they belong to a “winning team” – a group that has either proven their success in the past or has clearly defined strategies to do so in the future. On an individual level, employees need an understanding of the value they personally bring to the organization and they need to know they are making a valuable contribution to the team, the company, and its customers.

In their groundbreaking people management book First, Break All the Rules, Marcus Buckingham and Curt Coffman of the Gallup Organization discussed human nature as the last reserve of value to remain untapped by the vast majority of companies today. However, the power of human na-ture is unlike any other force of nature because “…each human’s nature is different. If companies want to use this power, they must first find a mechanism to unleash each human’s nature, not constrain it.”

The mechanism to unleashing each person’s best lies within your company’s culture – the out-ward manifestation of your social architecture, which is the method by which companies enable collaboration, build relationships and coordinate communication between people, across teams and even around the world.

So, how do you design your company’s social architecture to foster a culture in which your em-ployees will accomplish what you need while avoiding the pitfalls that are so common in a global workforce of multiple cultures and social standards that now also spans four generations? In working with the world’s largest and most complex companies, we have discovered there are five critical steps to build a culture leading to success every time.

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As in any social group, a company’s culture is defined by the people in it. The culture is the shared ways employees think and act, often learned over time and heavily influenced by their peers and man-agers. Yet organizational culture is a significant driver of employee engagement, which in turn determines how productive a person or working group is – all of which impact bottom-line results.

What is your company’s culture today? After spending so much time and effort developing a strategy, mission and values, company leaders hope those values become the basis for the com-pany culture, but that is not always the case. Unless the values are visibly and quantifiably re-inforced on a daily basis, they become nothing more than an engraved plaque hanging on the wall. Instead, the culture derives from perceptions and attitudes – the human nature – of highly differentiated individuals.

1 / DETERmINE whAT yOUR CULTURE IS TODAy

Social Architecture

Culture of Appreciation

Employee Engagement

Productivity

IncreasedBottom Line

The ResulTs of a solid foundaTion

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If done well, effective recognition can develop an international cadre of engaged employees who help drive the company’s long-term goals.

—wORkFORCE

mANAGEmENT, SEPT. 2007

a Global oR impeRialisT CulTuRe?Is your culture truly global or imperialistic and imposed from the country where your headquar-ters are located? We have repeatedly heard from our clients about the pain of past “global” initiatives in the company, whether they were HR programs intended to inspire or software sys-tems intended to simplify and streamline production. In nearly every case companies have first deployed in the headquarter’s country with eventual roll-out to outlying divisions with little con-sideration given to local languages, cultural norms, or work processes.

In a truly global culture all divisions in all areas of the world believe themselves to be equally valuable to delivering on the company’s stated mission. In this culture, all employees perceive their contributions to be critical to meeting and exceeding customer needs, thereby growing the customer base and increasing the bottom line.

a CulTuRe of inTimidaTion oR appReCiaTion?Is your culture based on intimidation or on recognition? The unintentional consequence of many productivity or quality improvement initiatives is the creation of a culture of intimidation to achieve goals – or else. In such an environment, employees tend to disengage from the company and their work, negatively affecting productivity and performance in a potentially devastating way. Gallup conducted a study in 2004 finding if a manager ignores an employee, the chances of employee disengagement are 40%. If the manager focuses on employee weaknesses, the chances of disengagement are 22%. And if the manager focuses on an employee’s strengths, the chances of the employee being disengaged drops to just 1%. In a subsequent study in 2007, Gal-lup found it to be not uncommon for between one-fifth and one-third of employees to say, “Not only have I not received any praise recently, my best efforts are routinely ignored.”

Focusing on their weaknesses or ignoring employees altogether will only serve to foster a culture of intimidation. Giving them work that draws on their strengths and then encouraging them builds a far more productive environment. In the same 2007 study, Gallup found the average benefit of a 10% increase in recognition to be 6.5% greater productivity and 2% higher customer engagement where each percentage point equates to hundreds of millions of dollars in sales for a Fortune 500 company.

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Companies are realizing that culture is as important as strategy and that they can’t just look at the short term anymore.

—BARBARA BILODEAU

DIRECTOR OF mARkET

RESEARCh AND

ANALySIS, BAIN & CO.

Many studies have been conducted to try to categorize what type of culture a company has and which is the most effective at ac-complishing that company’s priorities. Pundits seem to think that some combination of competition, cooperation and even aggres-sion helps companies deliver the goods.

Our global clients have proven differently, repeatedly realizing that a culture of recognition that reinforces the company’s stated values is the best strategy to achieve the company’s mission. A culture of recognition allows for individualism in approach to accomplishing tasks, but unites employees across geographical and divisional boundaries through a common attitude of recog-nition for tasks well done and goals achieved. It creates opportunities and a desire to say “thank you” throughout the day, month and year.

The leaders of globally influential companies are now feeling an urgency to develop a company culture appealing to employees’ need for a sense of belonging and value, a need for community in their workplace and positive relationships with high-performing peers and managers, a need to be recognized as individuals and to gain prestige for their contributions. In a study of more than 1,000 international executives conducted in 2007, Bain & Co. found nine out of 10 execu-tives believe corporate culture is important today as a strategy for success.

This executive buy-in is critical for the success of a strategic recognition program that fosters a culture of appreciation. To perpetuate an effective culture of appreciation, employees need to re-ceive relevant and valuable rewards that meet their need for psychic income – social acceptance, increased self-esteem and self realization. And such a recognition program should be driven by a core, in house program management team that encourages employees to make recognition part of their daily work. Senior-level validation of the recognition program and the program manage-ment team is essential, preferably through an executive champion responsible for driving global program awareness.

2 / CULTIVATE A GLOBAL CULTURE OF RECOGNITION

Dow’s Culture of Appreciation

• Recognition is a strategic project

• 90% of all global employees recognized someone in first year

• 87% of employees agree the culture of appreciation has improved

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Effective recognition initiatives are operated as part of a larger system designed to reinforce the key values of the organization.

—ThE CORPORATE

LEADERShIP COUNCIL:

whAT DO wORLD-CLASS

COmPANIES DO?

bRinG YouR CompanY Values To lifeOnce a culture of appreciation has been established through the use of a strategic recognition program, it becomes possible to bring your company values to life. An absolutely critical step in taking the values off the wall plaque and instilling them in the every day actions of the employ-ees is to ensure all actions or behaviors nominated for recognition are tied to a corporate value. In many companies, recognition happens on a one-on-one basis between a manager and an employee with no clear rationale behind the reward. For example, if a manager chose to reward a staff member for organizing a team morale boosting activity, then other team members may assume that making work more fun is a value to be rewarded when in fact that has nothing to do with the firm’s stated values.

When all nominated activities or behaviors are tied to a company value, then at least two people – the nominator and the recipient – must think about the values during the process. If such nomi-nations require approval, then even more people are reminded of the values. And if all recogni-tions within a set time period are then announced in a monthly team meeting, or shared through Social RecognitionTM, then entire teams or divisions will be reminded of the values and how to demonstrate and achieve them in every day tasks. In large, globally distributed companies this is virtually the only way to make the company values come alive for every employee at all levels.

The eConomiCs of sTRaTeGiC ReCoGniTionOnce rewarded actions and behaviors are tied to values, it becomes possible to report on the traction specific values have in the organization. Much like lagging indicators show where trouble lies ahead for economists, values not frequently rewarded become an indicator of where man-agement may need to intervene.

Our global clients use dashboards and value-adoption charts not only to track recognition pro-gram usage, but to target values adoption company-wide or even at the division or unit level. By targeting lagging values, managers can work with specific employee groups or divisions to bring everyone to the same level of understanding and acceptance of all of the values.

3 / EVOLVE yOUR SOCIAL ARChITECTURE

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peneTRaTe The enTiRe oRGanizaTion To Gain KnowledGeThis level of insight into company culture is not possible, however, in recognition programs where only the top 10% of employees are involved. At least 80% of employees in all locations must participate in the strategic recognition program for enough knowledge to be gathered on which values are not being selected as a reason for recognition. It is only when values adoption at every level of an organization is fully understood that the company culture can be manipulated by addressing those lagging values and influencing employees to improve in those areas.

For the same reason, the frequency of awards must also be significantly higher than is typical to achieve the level of knowledge on values penetration necessary to evolve a social architecture. Globoforce’s model encourages a high frequency of low-value awards to foster a culture of rec-ognition. Once a high frequency of awards to at least 80% of the employee base is reached, the strategic recognition program will market itself. As the Corporate Leadership Council recently noted, “If someone doesn’t feel appreciated, they can’t appreciate others.”

Elitist Recognition Program

No values adoption or manipulation companywide

Strategic Recognition Program

Social architecture evolvedCulture of appreciation established

Tactical Recognition Program

Little to no impacton company culture

Infrequent Recognition Program

Low Psychic Income value to participants

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Getting employees to be part of the communication process is more than a one-way cascade of information flowing from management. It’s about creating a culture where employees help lead the process.

—mELCRUm REPORT,

OCTOBER 2007

Once your strategic recognition program has at least 80% of em-ployees nominating for and receiving rewards, then the communi-cation begins to self-perpetuate. We have seen consistently across clients who have the highest employee satisfaction scores that when 5-8% of employees are nominated for rewards every week, then the program needs no further internal marketing or commu-nications “push.” And companies do not need to invest additionally to achieve these returns. Lower value awards will generate the same sense of goodwill in a much broader audience for the same budget as far fewer high-value awards targeted to the elite.

CommuniCaTinG a CompanY’s CulTuReNorthwestern University’s Forum for People Performance Management & Measurement found in a recent study that achieving a motivated workforce is only possible if employees are satisfied, which can only be accomplished through the development of an effective communication envi-ronment, both up and down the organization.

To effectively communicate, a common language is needed. In the case of your company’s culture, the common language should be based on a brand consistent with your company’s market brand, but unique to the strategic recognition program. Then, as discussed above, it should incorporate your company’s values and strategy into every level of communication, from recommendation, to award types, to approval process, to receipt and redemption – all translated into the local languages of employees around the world. With this type of unifying recognition language, the culture of ap-preciation will cascade throughout the organization.

impoRTanCe of ConsisTenT emploYee CommuniCaTionSeveral research studies during the last decade have shown the lack of effective communication deep into an organization is a major reason why people leave. This is largely because people need a sense of belonging and an understanding of how their jobs fit into the company’s mission. In essence, they need a social architecture.

A lack of consistency in communication can lead to confusion about goals, priorities and even company performance. A manager cannot only inform an employee of their tasks, but also must tie those tasks to the company’s strategy and success. Then the manager must take it a step further to show the employee how he, too, will benefit from the success.

Only when employees can make this leap from the personal benefit to the corporate benefit will they become fully engaged, allowing the organization to achieve a full return on the compensa-tion, training and other investments made in that employee.

4 / COmmUNICATE CONSISTENTLy AND CONSTANTLy

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No successful organization can have even one spectator. Instead, there needs to be a culture shift so that every leader and employee recognizes that they have a responsibility to the process. Engagement and collaboration must happen between departments and between levels (i.e., horizontally as well as vertically).

—mELCRUm REPORT,

OCTOBER 2007

When borders exist in an organization, whether they be geographic, divisional or because of position, progress slows. Nothing should im-pede the sharing of ideas or the flow of talent. Most importantly, how-ever, nothing should stand in the way of well-deserved recognition.

GeoGRaphiC boRdeRsA culture of recognition can break down the boundaries of country, continent, and language. In today’s multi-national corporations where a functional team or a division includes team mem-bers spread across multiple countries, it is critical to give employees the ability to interact with the system in their own language to ensure the spread of a culture of recognition doesn’t stop at the border. With language options in a Globoforce strategic recognition program it is possible, for example, for an employee in Beijing to view the portal in Chinese, but nominate a team mem-ber in Tokyo such that the recipient receives the reward in Japanese, while the manager located in Paris receives and approves the nomination in French, the reward is issued in Japanese yen, and the client is invoiced in pesos at company headquarters in Mexico City.

diVision boRdeRsWithin global organizations, it is not uncommon for divisions to share best practices, research, or even team members. An organization-wide recognition program branded with the company’s values and delivering a single consistent message on the company’s strategy and vision acts as the bridge between divisions. All employees everywhere, regardless of divisional reporting struc-ture, share a common language of appreciation, and a common culture of recognition.

In today’s hyper-active mergers and acquisitions environment, companies also need a way to excite newly acquired employees about the company’s values and strategy, to involve them in their new company’s culture, and to integrate them fully into the social architecture. A strategic recognition program that employees want to participate in, that recognizes employees – new and old – frequently and consistently, and that embeds the brand and the values into every day activi-ties is a powerful tool to increase the momentum of the integration process.

5 / ELImINATE BORDERS ThROUGh A CULTURE OF APPRECIATION

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emploYee boRdeRsAs recognition evolves a company’s social architecture, a global culture of recognition becomes woven in the very fabric of a company. Manager-to-employee, peer-to-peer, team-to-team – all are powerful recognition options, but too often companies limit their programs to the classic manager-to-employee model. While recognition from the manager is always valuable, a 2007 Gallup survey found positive words from any source activate regions of the brain related to re-ward, “creating an internal reward system that makes employees want to repeat behavior that the company needs, if doing the right thing earns them recognition.”

Peer-to-peer recognition is one of the most powerful methods for driving strategic recognition program penetration and acceptance, employee engagement, and bottom line results. When employees are given the power to thank their colleagues regularly and frequently – in the local language and currency – it unleashes a company’s latent power in its people to unite the work-force, energize a recognition program and drive productivity across the organization.

Gallup found in their 2007 study that recognition activates regions of the brain related to reward. One employee Gallup interviewed explained: “For me, receiving praise and recognition kind of sets off a little explosion inside. It’s kind of like, ‘Oh, that was good, but you know what? I can do better.’ It helps give you that drive to want to continue achieving, doing yourself one better.”

Are you in need of a social architecture that inspires your employees to be more productive? Are you prepared for the growth a culture of recognition can bring to your employees? Our recognition special-ists are ready to help you build a strategic recognition program that fosters a culture of recognition based on your company’s mission and values. Visit us on the web at www.globoforce.com or email us at info@globoforce.com. To speak to one of our global consultants immediately, please call: +1 888-7-GFORCE.

Founded in 1999, Globoforce is the world’s leading provider of SaaS-based employee recognition solu-tions. Through its social, mobile, and global technology, Globoforce helps HR and business leaders elevate employee engagement, increase employee retention, manage company culture and discover the power of real-time performance management. Today, employees across the world are living their company values and achieving peak performance through the Globoforce platform. A private corpora-tion, Globoforce is co-headquartered in Southborough, Massachusetts, and Dublin, Ireland. To learn more, please visit www.globoforce.com or the company’s blog at www.globoforce.com/globoblog.

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