Why Your Employees Don't Have to Be Happy to Succeed
Competing is a human activity, not yet outsourced to Siri, so employees who are skilled at competing should, in principle, make a company competitive. We think most reasonable people see the truth in this statement. You’d think businesses would, too, and would, therefore, train and test its people for skill at competing. The military does it all the time: They have their commanders face opponents’ maneuvers in war games and field exercises. They brief and debrief missions and exercises. They learn from mistakes and they build on success to help them outsmart real-life opponents.
So let’s take a look at how companies should train their people to compete.
How do you train employees to compete?
In business, training and testing the skill of competing is subtler and significantly more complicated than for the military. Competing skillfully involves integrating three elements:
- Strategic mindset. The ability to see the big picture, which includes seeing other market-players’ perspectives and identifying opportunities and risks that others don’t yet see.
- Leadership. The ability to lead a team in the desired direction, which involves the ability to show the internal logic of your strategy. You persuade your team to follow; you don’t have to order them to do so.
- Management. The ability to plan and execute a superior strategy while being alert (i.e., agile) to other market-players’ moves and countermoves.
We believe that the key to training employees to compete is by extensively and intensively using strategy simulations throughout their careers (including creating action plans and testing them against other players’ potential responses). We’ve seen it work in hundreds of engagements involving thousands of managers. The most effective simulations are war games, like the ones we’ve mentioned before, that pit teams who are role-playing the company against teams who are role-playing their competitors. Some war games use technology, quantifying outcomes using competitive-strategy models. Other war games use referees, letting senior executives judge which outcome is more robust.
If war gaming works so well, though, why doesn’t everyone do it? Why is it considered revolutionary rather than obvious? Because Corporate-with-a-capital-C thinks it’s already training and assessing employees’ skill at competing.
Corporate’s idea of training to compete applies the osmosis process: Shuffle people from assignment to assignment, from function to function, all so those people can accumulate experience and absorb wisdom. Then Corporate assumes haphazard trial and error can separate the competitively skilled from the unskilled. But are these type of companies really training people to compete?
Happiness isn’t necessary
Some companies actually excel in discouraging employees from competing by packing them into “open spaces,” speaking to them like a motivational poster, or paying them badly. Is the opposite necessary for skillful competing? In other words, if you pay well, speak honestly, and provide plush offices, does that improve how well you compete in the marketplace? Not so much. What raises employees’ skill at competing is training employees to compete.
We don’t intend to disparage HR’s functions. We don’t have much expertise in organizational-psychology science. That said, we’re somewhat skeptical of the value of “change consultants,” motivational speakers, and other modern shamans selling such profound wisdom as “Make sure employees are satisfied, and they’ll stick around longer.” They may stick around longer, but that doesn’t mean the company will succeed.
Employees who are skilled in competing will raise the odds of your business’ success. (Luck plays a part, too, but it’s not always good luck.) But happy employees? Only maybe.
If you say “Happy and skilled aren’t mutually exclusive,” you’re a kind spirit but not an empiricist. The biggest flaw in the wildly popular concept that happy employees will make a company compete better is that it’s not necessary for a company to reach its goals. Competitive strategy is necessary for reaching one’s goals as long as there are other players vying for the same goals. That’s because “competitive” implies your strategy can lead to reaching your goals despite other players’ strategies. Your strategy doesn’t have to be perfect, if there even is such a thing. Your strategy doesn’t have to be sophisticated, complicated, or best-ever. It’s competitive as long as it reckons with competitors and other interested parties in reaching your goals.
Decoupling happiness from competing
We’re not against happy employees. All we’re saying is that happy employees aren’t necessary for a company to succeed. They can’t save bad strategy, and they aren’t always necessary for a good strategy to succeed.
McDonald’s and the other giant fast-food chains are testaments to that. Anyone who goes through a drive-in window at rush hour can attest that a smile and a happy face are in short supply, and yet we all still go there because its costs only $20 to feed a family of seven. While a happy work force is probably more loyal, and a sour-faced employee isn’t a great inducement to come back and shop, the ultimate factor in performance is the strategy itself, not the people.
Instead of focusing on making employees happy, companies should train, test, and deploy their people in improving strategy. The best mechanism is to run war-game simulations, with mavericks, before important strategy decisions. The second-best mechanism is to identify mavericks and promote them. The third-best mechanism is to allow for strategic ideas to bubble to the top with little filtering. Not all ideas are good, not all employees are strategy-minded, but just repeating the orthodox formula over and over is a recipe for decline, and only mavericks are capable of changing the course.
We’re not against happy employees. We’re against empty hype. So let’s stop with the insincere hyperbole. The truth might hurt and platitudes might soothe, but “necessary adjustments to our global work force brought about by difficult demand conditions” puts the lie in “we are all in this together.” Improving a company and its employees’ skill in competing is a better strategy than syrupy slogans and will more likely result in improved performance. And now, everyone’s happy.