Dan Schneider

Employee vs. Stakeholder: Does It Make a Difference?
December 20, 2007

One of my favorite stories about the difference between a stakeholder attitude culture and an employee attitude culture involves two people who worked for a railroad. One day, a caboose was backed into the work camp. A “suit” walked out, stood on the platform, and said to those assembled: “If there’s a Joe Miller out there in the crowd, I’d like him to come up and have lunch with me.” Sure enough, Joe Miller was in the crowd. He climbed onto the caboose and went inside for a lunch with the company president. About an hour later, he climbed back down and rejoined his friends in the work camp. “What’s going on?” said one of Joe’s friends. Joe looked at him and said “Twenty-five years ago today, he and I both worked together in Omaha. He still keeps in touch on our anniversary.” Joe’s friend couldn’t pass up the opportunity to ride him a little. “Well, at least one of you made it big.” Joe looked at his friend, smiled, and responded “Yeah. The difference is that I went to work for $14.50 an hour; and he went to work for the railroad.”

The big difference between employees and stakeholders is called engagement. Here’s something that may come as a surprise to you. In a recent Gallup Survey, the renowned pollsters found that only 25% of the people on most payrolls think and act like a stakeholder. That means 3 out of 4 think like employees. That makes a difference to your top line, your bottom line, and all the lines in between. Can you imagine what would happen to your Business Performance (one of the ten succession success factors) if you could increase the number of engaged employees from 25% to 30%? To 35%? To 50% or more?  

If you’re having difficulty trying to imagine the results, let me share a few research based outcomes of increased business performance that were reported by an international consulting firm.

1.      Productivity and profit per employee increase.

2.      Retention of critical employees increases.

3.      Customer and employee attitudes show measurable increases.

4.      Most of the additional margin flows directly to the bottom line.

So, how can you increase the number and intensity level of stakeholders within your own organization? Begin by accepting this basic premise: Organizations and individuals consistently perform in alignment with their currently dominant self-image. In short, they operate within their comfort zone! I realize we’re talking about changing behavior, and I know most of us consider ourselves experts in human behavior. We’ve all seen attempts at change fail. Those that fail appear to have some common elements:

1.      Mis-starts.

2.      Making change an option.

3.      A focus only on process.

4.      A focus only on results.

5.      Too little involvement with those expected to implement the change.

6.      Total reliance on “outsiders”.

7.      No change in the reward system.

8.      Leadership doesn’t walk the talk.

9.      Lack of follow-through.

When we get back together in 2008, we’ll begin talking about how to implement successful change. In the meantime, best wishes for the current holiday season and a year full of financial and human capital growth in the months ahead!

Posted by Dan Schneider on December 20, 2007 | Comments (0)