By Nirup Nair
Actions speak louder than words! – I am sure, we are sufficiently clear on this concept and we also know what happens when there is an inconsistency between actions and words – the silence can be deafening. But how do these inconsistencies impact the corporates on an operational level, especially when examined within the purview of the global economy in its current shape and mood?
When the rank and file of an organization harbours doubts on a manager’s integrity and the motive for his actions, the problem can show up on the company’s bottom line.
Leaders are expected to ‘walk the talk’. Think of the manager, who is pushing the message of ‘Customer Delight’ in every department and subsequently, is seen making cuts in customer service staff headcount. He might have a reason for his actions, and could have had no alternative. But among other ends, he would also succeed in undermining his staff’s trust — and there will be a price to pay.
And what could be the price? Clearly, this manifests itself across the organization in several subtle and not-so-quantifiable ways. Staffers may be less engaged in their work, less receptive to new ideas, or less than willing to follow the leader towards their next Big Hairy Audacious Goal. What is really startling though, is its impact on the company’s profitability. When employees sense an inconsistency between what their leaders say and do, the situation helps in triggering a cascading effect — depressing employees’ trust, dedication and willingness to go the extra mile. These implications could act further to reduce customer satisfaction and increase employee churn, with adverse impact on the bottom line.
As part of a study conducted in the US to quantify this ‘cascade effect’ in a competitive service market, several employees participated in a survey, in which they were asked to rank how well their managers’ words and actions were aligned, by evaluating statements such as ‘My manager delivers on promises’ and ‘My manager practices what he preaches’. The employee commitment and service atmosphere in their companies were also gauged with the ranking of statements such as ‘I am proud to tell others where I work’ and ‘My co-workers go out of the way to accommodate special requests from customers’. These were further correlated with the company’s customer satisfaction surveys, HR records and financial statements.
The findings were spectacular. The companies, wherein employees strongly believed their managers followed through on promises and demonstrated the values they preached, were substantially more profitable than those, wherein the managers scored average or lower.
In case you like to see the statistics just to get the full view of the delicate balance between these factors, a one-eighth-point improvement in the company’s ‘integrity’ score, out of five, is expected to increase profitability by 2.5% of revenues. That’s a whopping $ 250,000 surge in profitability per year! No other single aspect of manager behavior had as large an impact on the bottom line.
The idea that integrity in behavior is important is a given – Aligning your actions and words in the way employees see it. Sticking to your word. It’s really quite simple. But if it’s so simple why is it so difficult to practice? Experts attribute several reasons to it:
Easily Branded – It takes a lifetime to build a reputation and a minute to lose it. A manager can get branded easily as a ‘hypocrite’ based on a single lie he has uttered; in contrast, a person has to demonstrate consistency throughout his ‘experiments with truth’ to considered as ‘decent’. Nonetheless, it is not enough to keep your word — your colleagues have to be aware that you are doing it. People we work with are pretty observant and they understand more than we realize. But they too carry their own baggages, biases and prejudices. So it’s not enough that you manage your levels of consistency and integrity — you also have to manage others’ perceptions without crossing the fence into cynical manipulation.
Conflicting Goals – Most leaders have to juggle diverse groups with different challenges and conflicting interests. In such a situation, clashes of words and actions are almost inevitable. Going back to the example of the manager, who slashed the strength of his customer service team — as he was pushing ‘customer delight’, he was also promising his bosses a budget cut by 15%. The priorities were different but were not necessarily incompatible. So, is this ultimately an inconsistency or smart and incisive management of diverse stakeholders? It all depends on whom you ask.
Frequently Changing Policies – Periods of change in the organization are particularly threatening. Departments change at different speeds; managers can get confused about a new approach; policies may seem inconsistent. Experienced managers might be able to perceive the larger picture, but the line employees are likely to hear only an inconsistent management voice and will attribute this discrepancy to the manager’s character.
Changing Fashions – New management ideas keep coming up in increasing frequency and the ‘flavor of the month’ keeps changing. Managers use these new ideas in a bid to show that they always own the cutting edge. But such ideas often fail, or worse still, they are quickly replaced with new ones. This creates skepticism among employees. It is good to explore and experiment, but dabbling comes with a cost.
Blind spot – The biggest issue is the managers’ inability to see an integrity problem in them. It’s quite natural to see ourselves as consistent. In several companies, a manager’s success in climbing up the corporate ladder lies in endorsing the espoused values, while his actual behavior may be differently aligned. For example, managers often talk about empowerment without actually yielding any power. If at all this happens, he lets his defense mechanisms work overtime, so that he can feel better about himself. This self-deception tends to perpetuate the problems that had initiated the process of empowerment.
It is not easy to identify behavioral integrity problems or to manage them, but this is pivotal to good leadership and is strongly linked to the company’s profitability. Conducting free and frank employee surveys is a good method to gauge how well the managers are walking their talk. Given the likelihood and the high costs of missteps a, it’s simply good business to make ‘integrity in the workplace’, an area of continuous focus.
About the Author
Nirup Gopalakrishnan is the General Manager of the CEO’s Office, and the Head of Human Resources at SunTec Business Solutions. Besides the shared overall responsibility for SunTec’s strategy and business development, Nirup also oversees the areas of competency development, business process improvement, internal audit and compliance.
Prior to this assignment, Nirup was associated with multinationals like Shell, Xerox and Hindustan Dorr Oliver Ltd, significantly contributing towards their sales, business development, channel management, key account management, operations and marketing initiatives. Nirup holds a Master’s degree in Business Management, as well as a degree in Chemical Engineering from the Bombay University.