Download - Northwestern Mutual Case Study

Fact-Based LeadershipDemonstrating a Quantifiable Link Between Employee Engagement and Productivity

The Jack Felton Golden Ruler Award recognizes excellence in public relations research, measurement and evaluation.

The award’s primary objective is to identify superb examples of research used to support public relations practice, and to publish these as case studies.

You can find Fact-Based Leadership and more on the Institute for Public Relations website, www.InstituteforPR.org

What Excites Us About This Work• Links employee engagement to hard performance

metrics

• Provides an innovative but practical approach to increase the business utility of internal communications

• Moves beyond the corporate newsletter to influence interactions on the frontline

About Us

Supporting the Life-Long Financial Security of Policy Owners

• 150+ year old mutual company

• Take a long-term view for clients

• Challenged by, but working from a position of strength in today’s economy

• Products & Services:

• Life, Long-Term Care, and Disability Insurance

• Investment Products & Services

• Employee and Executive Benefits

• Annuities, Trust Services, Estate Planning

• FORTUNE’s “Most Admired”

Our Culture• Built on foundation of

risk management business

• Leaders describe the culture as “left brained”

• Intense focus on benefits to clients

• Politeness pervades

The Challenge• Build a business case for employee engagement that will secure budget

• It must stand up to analytical scrutiny by demonstrating measureable impact on the business

• And, it must be compelling enough to be chosen from hundreds

The Approach

Define Scope & Objectives

ConductResearch

Connect to Bigger Picture

PilotEngagementApproach

Codify & MarketInternally

Develop 2010 Plan & Budget

Integrated Implementation

Research Overview

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EXTERNAL LITERATURE REVIEWSummary of relevant studies on intrinsic motivation’s link to business outcomes

LEADER INTAKE SESSIONSInterviews with leaders to understand priorities and potential areas of focus for the pilot

LINKAGE ANALYSISStatistical analysis of current survey tools and business metrics

External Literature Review HighlightsProven Drivers of Engagement• Leadership based on vision & mentoring

• Empowerment and accountability

• Fairness in promotions

• Good communication & access to credible information

Job Features that Improve Engagement

• Allows the employee to make a contribution

• Provides a modicum of autonomy

• Provides an opportunity to stick with tasks long enough to develop a sense of mastery/ competence

Proven Outcomes of Engagement

• Productivity and increased efficiency

• Increased revenues

• Better customer satisfaction

Proven Interventions• Restructured jobs

• Changed ideas about accountability

• Leadership communications

• Improved information flow

©2009 Employee Motivation & Performance Assessment, Inc.

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Leadership IntakeHighlights

• Tie to metrics that are “scale-able”

• Improve leadership skills

• Conduct pilot in operational and professional service groups

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Linkage AnalysisHighlights 400x

Statistical Note: MODEL 01: Freq: Survey N; Covariates: HC 2008, RR 2008

• Identified a proxy metric to focus pilot efforts on productivity

• Isolated behaviors from the employee survey — Fact-Based Leadership

• Tested the link between Fact-Based Leadership and productivity

TEST 1 – ASSOCIATIONFBL and our productivity measure rise and fall together simultaneously

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FACT BASED LEADERSHIP 2008



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FACT BASED LEADERSHIP 2006

TEST 2 - PREDICTIONThe better the score for FBL in 2006, the better the score for productivity in 2008

TEST 3 – EXCLUSIONDrivers that have been linked to productivity in other companies do not seem to be driving productivity in the 2006-2008 dataset.

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2008-50-OPEN COMMUNICATION IN DEPT

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Test 4 – Dose-DependenceThe greater the increase in FBL during previous years, the better the productivity this year

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CHANGE IN FACT BASED LDRSHP 2008- 2006

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Research Outcome

KEY FINDINGFact-Based Leadership seems to drive productivity at Northwestern Mutual

HYPOTHESIS FOR PILOTIf we increase Fact-Based leadership, emphasizing:

1. Intellectual challenge2. Good information from

leaders3. Feedback that is

constructive, supportive and helpful; and

4. Pragmatic metrics that are useful

Then, we should enhance engagement and improve productivity

Pilot Design

Conduct 4 pilots over a 13-week period to test the hypothesis:• Select departments against criteria

• Identify and collect KPI metrics

• Divide each pilot group into control and experiment groups.

• Apply “interventions” in experiment groups

• Administer a pre- and post-test survey with random assignment

Attendees: Managers, directors and department HR Reps of experiment groups

Content: • Introduction to Fact-Based

Leadership• Overview of “intervention” activity• Self-evaluation of leadership

approach• Individual goals-setting for pilot

period

Takeaways:• Managers Toolkit• Personal Planning Template• Study Group Schedule

Manager Training

Manager Study Groups& Coaching• Building Trust & Credibility• Thoughtful Evaluation• Comfort with Change• Prototyping &

Experimentation

• Drivers of Motivation• Managing Conflict• Giving & Receiving Feedback

• Impact of Indirect Communication & Triangulation

• Managing Conflict• Communication Styles

• Metrics That Matter• Team-Based Metrics• Impact of Perceptions

Manager Resource Site

Pilot Results: Engagement Increases in Experiment Groups

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CONTROL EXPERIMENT

The Employment Motivation Index (EMI) in the four control groups fell from Spring 2009 to Autumn 2009 – perhaps due to cyclical changes in workload, season, or market pressures.

However, during the same period the four treatment groups – which were selected by random assignment and matched in size and type of work – saw their EMI scores rise just as we hypothesized. The difference of 3.8%, although small in magnitude, is highly statistically significant (p < .0001) and quite promising given the short duration of the pilot study.

The analysis took each respondent and measured change in EMI scores from pretest to posttest. The model was highly significant. R2 = .86; F = 84.9 p < .0001.

All covariates included in the model were statistically significant. Beta = -.003; p < .05. TREATMENT /CONTROL GROUP; USING EVIDENCE; INTERPERSONAL COMM & FEEDBACK; INTELLECTUAL CHALLENGE & MOTIVATION, MEANINGFUL METRICS

Pilot Results: ProductivityIncreases in Experiment GroupsOPERATIONS GROUP 1

Cases Closed per Employee per Month

OPERATIONS GROUP 2Final Actions per Employee per

Month

Operations Group 2 results represent an average of two Control and Experiment Groups combined.

Pilot Results: ProductivityIncreases in Experiment GroupsEven before we control for the effect of some important confounding variables (such as amount of PTO, the employee’s number of years on the job, etc.) it is clear that on average, the control groups had a smaller amount of change than the experiment groups.

Also, each experiment group experienced an increase in their productivity.

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Control Group D

Control Group A

Control Group B

Control Group C

Treatment Group A

CONTROL GROUPS TREATMENT GROUPS

Treatment Group B

Treatment Group C

Treatment Group D

Systemic Results &Program Expansion

CONTINUING THE INVESTMENT:• Implementing Fact-Based Leadership

Approach

• Updated annual employee survey to have greater business utility

• Implementing an effort to increase dialogue through managers

• Developing an Employee Value Proposition (EVP)

KEY INTEGRATION POINTS:• Strategy Map Metrics Deconstruction effort

• Accountability and Metrics “Line of Sight” Workshops

• Organizational Design and Span of Control initiative

Discussion

• How do you measure the impact of internal communications in your companies?

• Where have you been successful?

• What opportunities do you see to build on that success?

Thank you!Kevin Olp Morgan Marzec (414) 665-2179 (312) 282-3321 [email protected] [email protected]

Dr. Palmer Morrel-Samuels(734) [email protected]

Access the white paper on this case study on IPR’s website:http://www.instituteforpr.org/research/awards/golden-ruler/winners/2010-golden-ruler