“So long as the bosses pretend to pay us, we will pretend to work.”
That old joke among workers in the Soviet Union continues to resonate today, albeit in an unlikely place: US employees today demonstrate a similar level of workplace detachment, according to Gallup.
Only 35% of workers say they are highly engaged while more than half describe themselves as not engaged.
In the investment world, this presents a paradox. While many investment professionals express passion for their work, according to CFA Institute, FCG’s culture database offers contradictory evidence. Two values that relate directly to engagement — passion / motivation and employee empowerment — are not highly prized, according to our culture surveys from more than 200 investment firms.
Value Ranking: Passion / Motivation and Employee Empowerment
|Values: from FCG Database of Culture Surveys||Existing Rank
(Out of 67 Choices, Ranked from 1 to 67)
(Out of the Same 67 Choices)
|“Jump” Up from Existing to Aspirational
(Column 2 Minus Column 3)
(Ranks the Values with Largest Gap between What a Firm’s Staff “Has” and What It “Wants.”)
|Passion / Motivation||36||12||+24||6|
Though employee engagement — as measured by these values — is not high for investment firms right now, the aspirational columns in the chart above demonstrate that staff members want more engagement. But the gap between what they aspire to (“want”) and experience in their firm (“have”) is especially large for engagement values.
These results reflect the global picture. A recent survey of 38 industries found that employee engagement is one of three values that “made it through” the pandemic. The other two were: Teamwork and Excellence / Continuous Improvement (EC). All the rest of the top values pre-pandemic fell away amid the crisis:
|Pre-Pandemic Global Values
|Post-Pandemic “Aspirational” Values
(Needed to Survive and Thrive after COVID-19)
|Organizational Growth||Innovation / Creativity|
|Making a Difference||Open Communication|
The message is clear: Employees value engagement. They want cultures that make it a priority and have mindsets that foster it.
There are three factors that strongly contribute to engagement and motivation: Mastery or Excellence / Continuous Improvement (Mastery / EC), Autonomy, and Purpose. (For more on these three factors, see Daniel H. Pink’s Drive, or his 10-minute YouTube video.) In a study of 312 investment professionals, these three motivators were ranked as follows:
1. Mastery or Excellence / Continuous Improvement
Mastery / EC will continue to be a top value for all industries, including finance. This value has jumped up from the 16th highest ranked “existing” investment value to the second “aspirational” value, behind Collaboration / Teamwork. Investment employees want lots more emphasis on Mastery / EC in the future. Two drivers explain the jump: The investment industry is tougher than ever, so excellence is essential, and knowledge workers enjoy the challenge of learning and raising their game.
Mastery / EC is a hugely important value for investment leaders to focus on. Many have responded by offering more career pathing, formal and informal coaching, mentoring programs, money allowances for courses, conference opportunities, professional degree reimbursement — the CFA designation, for example — and so on.
Another contributor to Mastery / EC, according to our research: helping employees identify their highest and best use, what we call their “genius.” Genius is the intersection of three factors:
- What contributes to the firm’s success
When staff members find a role that meets all three criteria, they are highly engaged. The difficulty is that many cultures don’t cultivate mindsets that help identify and place people in their genius. For example, many employees have never been asked what their highest and best use is. In fact, they are often discouraged from exploring their genius zone.
Many firm cultures take the puritanical view: Work should not be enjoyable. Every job has boring tasks. Just suck it up and do them. (Oh yes, and eat your vegetables . . . ). This is the chief obstacle that keeps staff from finding and thriving in their genius.
Our rule of thumb is that leaders and employees should collaborate to find roles where people can spend 70% of their time in the genius zone. We asked numerous investment teams to calculate their “genius zone percentage” and found the average to be 20%. What’s worse, nearly half of investment professionals are spending less than 40% of their time in the “genius zone,” according to real-time polling at our various CFA society presentations. Engagement drops off considerably at these low levels.
Leaders should sit down with employees and explore their genius talents. When found, everyone wins: the individual, the leader, the clients, the firm, and the owners!
Amid the COVID-19 pandemic, the world has looked at autonomy with new eyes. The mindset has shifted from “face time is best” to “remote has its advantages.”
Leaders have learned that work still gets done when people are out of the office. The results-only-work-environment (ROWE) approach has now been tested and validated. (For more on ROWE, see Why Work Sucks and How to Fix It, by Cali Ressler and Jody Thompson.)
In the investment world, some firms adopted this framework prior to COVID-19 with great success. Others resisted and also succeeded. But the latter group experienced more internal friction because discord arose around favoritism and unequal treatment regarding office hours.
With ROWE, there are no office hours or vacation policies and therefore no friction. (Part of the ROWE environment’s paradigm shift is dropping such snarky comments as “Glad you could join us today” when a colleague walks in at noon. The relevant point is: Did you get your work done?) What will happen to firm policies after COVID-19? That will be interesting to watch. Presumably, many firms will loosen up their “butts-in-chairs” focus. After all, they had to abandon it and found that it wasn’t so bad.
(Note: the ROWE approach does not advocate for remote work. It simply recommends giving staff the autonomy to work in whatever manner suits them best.)
Employees are motivated when their work feels important and when they view their job as important to that work product. For years, investment firms have missed the opportunity to leverage this engagement factor.
The CFA Institute “Discovering Phi” study found that 70% of investment professionals felt passion for their work. But in that same group, only 17% found their work purposeful. Until recently, most investment firms had uninspiring vision/mission statements that simply described what they did:
“We provide excellent investment returns while providing first class client service.”
This statement has no vision of success. Where are we going? What is the picture of success? It doesn’t say. Neither does it have a mission / purpose. Why do we do this work? Why is it important? How does it benefit stakeholders? The statement doesn’t tell us.
So it’s hardly surprising that the “purposeful” score was so low. To enhance engagement, investment leaders should emphasize that they do provide a valuable and meaningful service. As the pandemic has shown, health — sheltering in place for safety — and wealth — opening the economy for prosperity — are critical forces in our lives. Investment contributes to the wealth piece of the equation.
By way of comparison, tobacco companies might have more difficulty convincing their employees that their offerings are vital contributions to society. (No judgment here . . . )
Investment leaders don’t have that challenge. Building and preserving financial wellbeing is core to a decent standard of living. Many state agencies that manage the pension accounts of state employees — police officers, firefighters, teachers — have that sense of purpose. Many have taken jobs with them for that very reason.
At one state agency, an investment professional remarked, “I know I could make more money on Wall Street, but I want to help the teachers who taught my children.” Engagement levels are very high with such people.
The prescription for the leaders who run “17% firms” is to make clear the connection between the services they render and the contributions they deliver to clients. One active equity manager we know has identified this need and solves it by bringing in clients to meet with staff members. When employees can see the beneficiaries and hear their stories, their motivation rises. These encounters make investment work real and relevant.
No discussion of engagement would be complete without exploring the Gallup Twelve (G12) engagement survey. Gallup unleashed its massive survey machine to study what drives engagement and found 12 factors, several of which relate directly to Mastery / CI, Autonomy, and Purpose, as the chart below demonstrates.
|Cultural Factor||Relevant G12 Factor|
|Master / Continuous Improvement||Someone has talked about their progress.
Someone encourages their development.
They have the opportunities to learn and grow.
They are able to do their best every day (i.e., work in their genius zone).
|Autonomy||They know what is expected of them at work.
They have equipment needed to do their job.
|Purpose||They view their job as important to the company|
Most of the Gallup 12 are about good management. Top managers appreciate their team members, clearly describe their roles and responsibilities, and provide resources to do their work. When performed well, these basic management practices drive high engagement. No question. But the larger mindset is what all managers should understand and practice as they seek to raise employee engagement.
Three primary levers drive that engagement. Managers should know that employees want to grow and develop. They want to feel pride in their work. They want challenging assignments.
Managers should also understand that engagement increases when staff feels more control over their work lives. When they have autonomy, they feel more respect and trust from and for their manager.
The overriding management concern used to be “If we’re not watching them, they won’t work.” COVID-19 has rendered that mindset obsolete.
All around the world, bosses are realizing, “Gee, employees do have a conscience and an internal desire to succeed. Maybe I don’t need surveillance cameras.”
As human beings, we want to feel useful, to be of service. When employers describe how the firm serves stakeholders, employees feel more motivated and engaged. Leaders would be wise to educate their staff members about the contribution that their work makes to the world. Raise that 17% number to match the passion number: 70%
Pull on these three levers — Mastery / CI, Autonomy, and Purpose — and watch engagement levels soar. In the US context, the old Soviet joke about workers pretending to work will evaporate: Bosses do pay them, and they do work. Which is how it should be.
And yes, you should also eat your vegetables.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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