Simplification, Engagement and Trust: Baylor University Paper

Executive Summary: The ultimate goal of the research is to understand the relationships among simplification, engagement, and trust (SET), and, in so doing, to contribute to better functioning organizations of the future. Furthermore, this research seeks to discover if relationships among SET are different for millennials than for other generational groups. Findings: Through a series […]

Hankamer School of Business, Baylor Graduate Business StudiesHankamer School of Business, Baylor Graduate Business Studies

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Executive Summary:

The ultimate goal of the research is to understand the relationships among simplification, engagement, and trust (SET), and, in so doing, to contribute to better functioning organizations of the future. Furthermore, this research seeks to discover if relationships among SET are different for millennials than for other generational groups.

Findings:

Through a series of interviews, research, and thought exercises with thought leaders, both within and outside of SAP, Baylor MBA students developed specific definitions for trust, engagement, and simplification in order to determine how SET are related. Based on these definitions, students identified key points below.

Trust

(1) Confidence in the organization to do what’s promised. (2) Confidence to act in the best interest of the organization without punishment.

  • Trust is one of the most important aspects attributed to successful simplification.
  • It is common thinking that trust is absolutely necessary in order to simplify processes successfully.

Employee Engagement

The emotional connection an employee has with their organization. It is the positive attitudes, beliefs, and behaviors towards their organization.

  • Highly engaged employees are 87% less likely to leave their companies than their disengaged counterparts (Fermin).

Simplification

The elimination of the inane to encourage the creation of value and purpose.

  • Simplification is the process of making a complex process faster, easier, or more efficient.
  • Simplification is not a “one-and-done” concept, rather a consistent mindset that organizations must adopt in order to do it successfully.

Millennials

Millennials are those born after 1982 and who are actively participating in the workforce.

  • Millennials have grown up with information and transparency. Millennials will always ask the question of why are we doing this and they will not accept and an answer that does not explain the value of the action.

Illustration:

SET correlates to the three main parts of a hot air balloon: (1) the basket, (2) the gas and flame, and (3) the balloon itself. The basket represents trust within the organization. It is the foundation, and it is necessary to sit in the hot air balloon in order to take a ride. Simplification is represented by the gas and flame, it is the fuel to fill the hot air balloon. Lastly, the balloon itself represents employee engagement. The more engaged a company’s employees are, the better the company performs. Likewise, the bigger the balloon expands, the more likely it is to get off the ground.

Key Questions:

  1. What is the relationship between simplification, employee engagement and trust (SET)?
  2. Do Millennials view SET differently than other generations?

Why SET Matters:

  • 13% of employees are actively engaged at work*
  • 48% of the workforce will be Millennials by 2020*
  • 51% of employees do not trust senior management*
  • $237 billion will be wasted by the 200 biggest companies in the world each year due to complexity*
    (SAP Future of Work Study*)

Methodology:

  • Conducted 35 written and in-person interviews with business simplification leaders over a three month period
  • Distributed a thought exercise to 40 individuals within the Baylor network
  • Analyzed the data to uncover emergent themes regarding thought processes among generations

Key Terms:

1. Trust
Confidence in the organization to do what’s promised and confidence toast in the best
interest of the organization without punishment

2. Engagement
The emotional connection an employee has with their organization

3. Simplification
The elimination of the inane to encourage the creation of value

Relationships between SET:

Our Process:

While we originally viewed the relationship between SET as linear or circular, we realized that neither of those pictures accurately reflects the participants’ responses and the intricate connection between the three themes. Therefore, we came up with the hot air balloon model as an innovative and clear image that reveals the relationship between SET.

Hot Air Balloon Model:

Simplification, engagement, and trust are all nebulous ideas that can be difficult to understand in a concrete and tangible manner. The hot air balloon model aims to ground these subjective terms by identifying their interactions with one another. While it may seem like a childish representation of such significant topics, the model simplifies the findings.

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Trust

Baylor 3Trust is defined as confidence in the organization to do what’s promised and confidence to act in the best interest of the organization without punishment.

Trust is the basket that binds the organization and gets people on board with the mission and vision of the firm. If you do not have trust in leadership and company strategy, simplification is irrelevant.

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Nearly half of our interviewees expressed their belief that managers should release control to their employees so they have the opportunity to make the best decision for the organization. Micromanagement and over engineering a process often reflects a power struggle between managers and employees (Jensen). This power struggle is rooted in the fear that employees will make mistakes or take advantage of the organization. In turn, managers create a large system of checks and balances that ultimately hinders the work of others, rather than establishing a flexible decision-making framework that empowers employees.

The creation of complexity due to a lack of trust in employees can manifest in a variety of ways. For example, a project approval process may need multiple signatures or an expense report can be flagged and delayed for a small $5 budget overage. These are complexities that do not add value to the organization and will ultimately frustrate employees. Frustration creates a sense of helplessness and ultimately disengagement in the organization (Zenger). Managers should understand that trusting employees allows them to do their best work.

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Engagement

Baylor4Employee engagement is the emotional connection that an employee has with their organization. It is positive beliefs, behaviors, and attitudes that an employee directs towards an organization.

Engagement is the balloon that moves the organization up. The balloon can inflate or deflate depending on the level of engagement in the firm.

Companies with a high level of engagement have two times higher operating margins than companies with low levels of engagement (Gallup 2013). By the same token, companies with high levels of engagement have 22% higher shareholder returns than companies with low levels of engagement (Gallup 2014).

During the interview portion, the participants were asked to describe the relationship between simplification and engagement. Employee empowerment was a common theme across each interview, in fact, the word “empowerment“ was the number one word was spoken. Along with employee empowerment, employee engagement increases when simplification is done well, however has an adverse effect when simplification is done poorly (Bodell). Employee engagement is a byproduct of simplification and trust in leadership.

During the interviews, it became apparent many interviewees had encountered situations where employees had a negative view of the word “simplification.” Many thought that simplification was a way to justify layoffs or role reductions. Clarifying the definition of simplification is a key component in this process to relieve negative connotations of the word.

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Simplification

Baylor5Simplification is the elimination of the inane to encourage the creation of value.

Essentially, it is reduction of the complex in an intentional effort to create value. Simplification entails throwing away what doesn’t add value and can occur any number of ways:

  • Streamlining a user’s experience across multiple
    platforms
  • Removal of a redundant or drawn-out processes and
    approval hierarchies
  • Clarifying an otherwise convoluted mission statement.

Each of these instances reinforces the presence of trust as a prerequisite for simplification to be the catalyst to employee engagement. Through our research and interviews, we conclude that simplification is a cultural mindset and its implementation spans the entire organization. Therefore, leadership holds the key to the gas and the flame.

Additionally, simplification can go by a number of names and its realization isn’t all-or-none; it is progressive and incremental. We developed several potential areas or levels of focus within an enterprise seeking simplification: product, process, strategy, and organization. Each of these can provide different avenues for implementation, the processes and methodologies are dependent on the particular focus. For example, the steps an enterprise takes to shorten a short-sighted expense reimbursement process would vary compared to the restructuring of multiple layers of management. Simplification operates in a similar fashion: it must be tailored to its intended result.

From our research we were able to develop “pillars of simplification,” a procedural map that provides a basic framework to each areas of focus:

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There are two main methodologies that firms embrace when it comes to simplification. The first is responsive, or reactive, simplification. This is simplification done as a reaction to events, most notably poor financial performance within a firm. This is typically caused by poor economy, poor management, and massive sales declines. We witnessed the poor economy unfold in 2008 with the stock market crash. Companies were forced to cut costs and lay off employees just to keep the company relevant.

An example of massive sales declines is the check printing industry; when online bill paying emerged, this resulted in massive sales declines for these companies. They were forced to cut costs and slim business lines in order to keep cash flow positive. This type of responsive simplification typically results in poor results and is a temporary solution that leads to distrust with leadership in a company.

The second methodology firms embrace is strategic, or proactive, simplification. This approach is a cultural mindset a firm embodies. Strategic simplification requires everyone in the firm to accept its importance and is the leadership’s responsibility to communicate and implement. While this approach takes an upfront and substantial investment of time and effort for leadership, the long-term reward is much greater than a reactive approach. The goal of strategic simplification is to continually improve the firm in terms of speed, agility, and alignment. The result is quicker decision-making for priority topics, which leads to faster capitalization on opportunities. Additionally, the firm becomes more adaptable to changes in the market and industry.

The concept of simplification has become increasingly popular in recent years. Complexity is something that almost every firm in today’s rapidly changing and evolving workplace has to face; it is unintentional and naturally develops over time. Firms have realized this and are now placing a strategic importance on simplification efforts.

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Strategic simplification will continue to grow in importance, It is not only important for firms to recognize this, but also to think through and incorporate the overall organizational strategy before implementing simplification efforts. If this is not done in this order then firms are essentially putting the cart before the horse and will fail in their efforts.

Millennials

Baylor7After examining the relationships between SET, our team also analyzed how Millennials respond to simplification efforts. Millennials in our study are classified as having been born after 1982 and are currently employed.

In general, Millennials have grown up with infinite amounts of information and exposure to the best and worst parts of our society through a wide variety of media outlets. Millennials will frequently ask the why behind the what they are doing and generally will not accept an answer that is not fully transparent.

In our interviews, there was a 60/40 split of opinions on Millennials. 60% of our interviewees had the viewpoint that Millennials have been shaped by technology and the abundance of information. However, this viewpoint was not universal. The remaining 40% of interviewees saw Millennials similarily to other generations.

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In our research we found that Millennials frequently approach simplification efforts with a desire to improve the organization, while previous generations approached simplification efforts with a desire to please their supervisors. In order to gain a better understanding of these possible differences, our team conducted a thought exercise with a focus group (Appendix A).

The thought exercise led participants through an exceedingly bureaucratic process. After reading the process, we asked the respondents how they would simplify and what criteria motivated those choices. 40 individuals took part in the exercise and the results were then broken down by Millennials vs. Non-Millennials. Though the exercise did not have a large enough sample size to be statistically significant, we did find a handful of interesting trends that we felt could warrant future research.

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Summary

To further promote the idea of “Run Simple”, firms should understand the relationships between SET. In providing this context, the term simplification will avoid becoming just another “buzzword” and instead provide targeted and cultural perspective to employee engagement. Promoting the SET relationship includes defining its composite parts, differentiating it from other operational approaches, and disarming assumptions regarding its implementation.

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Citations

Baylor University MBA Candidate Thought Exercise, March 2015.
“Talent 2020: Surveying the Talent Paradox from the Employee Perspective.” Deloitte. Deloitte. Web. 14 Sept. 2012.
Callahan, Bob. Personal Interview. 19 Mar. 2015.
Sampson, Leslie. Personal Interview. 18 Mar. 2015.
Willyerd, Karie. Personal Interview. 16 Feb. 2015.
“Future of Work Study.” SAP. SAP Future of Work. Web. Dec. 2014.
Zenger, Jack, Folkman, Joseph; “Why Middle Managers Are So Unhappy” HBR, Harvard Business Review. Web. 24 Nov. 2014
Ferman, Jeff, “10 Shocking Stats About Employee Engagement”. Office Vibe, Web. 28 Jan. 2014
Simon, Bill. Personal Interview. 5 Mar. 2015.
Arnhart, Bracken. Personal Interview. 20 Mar. 2015.
Jordan, Rodney. Personal Interview. 6 Mar. 2015.
Bodell, Lisa. Personal Interview.

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