Life/Work - Issue 40

While the stores are designed to be nearly identical in design and operation, their employees had radically different experiences. The number of employees giving a five to one of the dozen questions averaged as much as 60 percentage points higher at the most productive stores (those with the best retention rates, highest profits, and so on) than at the least productive stores. Indeed, employees at the most productive stores typically gave higher marks to all 12 questions than employees at the least productive stores. This was true even in the case of the question about whether employees had the materials and the equipment that they needed. In the most productive Best Buy location, 45% of employees strongly agreed that they had what they needed, compared with 11% in the least productive location -- even though both stores had exactly the same materials and equipment. In short, the subjective perception of employees outweighed the objective reality.

In measurable terms, stores whose employees ranked them in the top 25% on the 12 questions exceeded profit goals by an average of 14%, while stores ranked in the bottom 25% fell short of profit goals by a startling 30%. Stores in the top 25% retained a total of 1,000 more employees than did stores in the bottom 25%. By Gallup's estimate, this translated into an additional $27 million in direct hiring and training costs for stores in the bottom 25%.

"You take the same company, the same system, and basically the same pay scale, and yet you get tremendously different attitudes among employees from different stores," says Brad Anderson, president and COO of Best Buy. "The only logical explanation is leadership. We knew that the human side mattered, but these questions helped us understand just how it mattered. Someone who is gifted as a manager knows how to unlock the skill sets of people who work in that environment."

Buckingham and Coffman's second quarrel with conventional wisdom is over what makes a good manager. Here they relied on the responses that they got from top managers whose divisions consistently outperform those of their peers.

The authors' most controversial conclusion is that people can't really change -- and that managers who spend a significant amount of time trying to help their employees overcome deficits are missing the boat. Skills can be trained, Buckingham and Coffman argue, but talents -- such as empathy, strategic thinking, attention to detail, and creativity -- cannot. "If you've got someone who is constantly putting his foot in his mouth, some training in social skills and empathy might be useful," says Buckingham. "But let's call it 'damage control,' not 'development.' There is nothing more debilitating than lining up 27 competencies and trying to train people in the ones that they don't have. It doesn't work, and it breaks a person down psychologically." Far better, Buckingham argues, to focus on nurturing people's existing talents.

My own conviction is that people can change and that, while we all plainly have different aptitudes, critical "talents" such as empathy and strategic thinking can be learned and significantly improved. But there's no denying an element of truth in Buckingham and Coffman's conclusions. Change is very difficult under the best of circumstances. Typically, managers pay less attention to nurturing people's existing talents than they do to trying to fix their deficits.

Most companies, Buckingham says, aren't even playing the right game: They've confused checkers and chess. "It's a flawed assumption that everyone can be good at everything," he says. "Most companies treat every one of their people the same. They play checkers with them. The best managers play chess with their people, knowing that every person is different."

More persuasive still is Buckingham and Coffman's argument that great managers should ignore the Golden Rule -- "Do unto others as you would have done to you" -- and should instead treat employees as they would like to be treated. Some employees perform better with an explicit set of procedures and rules, for example, while others are less effective when faced with such rigidity.

"Our 12 questions address the most desirable emotional outcomes from people, not step-by-step guides to getting them," says Buckingham. "One person may give praise by bringing everyone together in a group, and getting them screaming and clapping. Another manager may write beautifully crafted little notes to people and never say anything to the group as a whole. If you standardize the end that you are seeking, then you don't have to standardize the means of getting there."

Still, there are precious few companies that pay significant attention to how their employees feel about their supervisors, or recognize how important that can be. In effect, the Gallup research establishes both a way of measuring the qualitative, or "human," skills of a manager and clear evidence that such skills directly influence not just employee satisfaction but also profit and retention.