How to Improve Corporate Performance

Most CEOs have a good idea of the energy level in their organisations. But they cannot really measure it or interpret it effectively. It took BERND VOGEL, Associate Professor of Leadership and Organisational Behaviour, Henley Business School, University of Reading, UK, andHEIKE BRUCH, Professor of Leadership, University of St. Gallen, Switzerland, 10 years to devise a means of doing just that, which they explain in their book Fully Charged. In an interview, Vogel discusses the issues raised in the book. Edited excerpts:

Is it the ability to create organisational energy that differentiates a successful company from a notso-successful one…

Yes. Organisational energy directly affects the performance of companies. When companies make use of their full potential to pursue their goals with high levels of passion, mental agility and effort, they are significantly more innovative, generate more customer passion and grow quicker. Also, when employee potential is left to languish because of poor use of organisational energy, revenues are lost and over time an organisation’s viability is threatened.

You have also questioned the existing appraisal system, asking executives not to focus solely on motivating individual employees…

Exactly. Most rewards today look at the individual. But businesses work as a collective. It is not individuals who make the difference, though many people would like to believe that. Executives must go beyond thinking only of the individual. By focusing on individual’s energy they risk missing out on the totality of the human forces they have at their discretion. A company’s collective dynamic force is much stronger than the sum of individual forces or motivations.

What are the various forms of energy?

Our research has thrown up four distinct energy states. Productive energy is characterised by high enthusiasm, excitement, a ‘can do’ mentality, alertness in looking out for opportunities, and doing so collectively. Comfortable energy is when employees are more relaxed, satisfied with what they are doing, and not questioning the processes. We also found there is huge negative energy in organisations. Teams that are detached and do what they are asked to do, work nine to five typically and are in a state of resigned inertia. And the most worrying is corrosive energy when people are highly intensive and engaged but towards their own goals or agendas. They hinder change. Cynicism, conflicts, frustration and aggressiveness are rampant.

You say all forms of energy coexist in an organisation. If so, what is the ideal mix?

An ideal mix is where productive energy is dominant. We will always have a certain level of comfortable energy in every organisation. People tend to get satisfied, especially in companies which have been successful over a long time. There will be pockets of negative energy, too. The question is the level. There is no friction-free organisation.

How can a leader trigger productive energy in a company?

A challenge or opportunity can be used as a trigger to kick-start productive energy. An existing threat or a potential threat can be used to galvanise the people in the company. We call this “slaying the dragon”. The challenges could be a market breakdown, takeover bid or a technology threat, to name a few. The other option is identifying an opportunity to lift or mobilise an organisation. We call this “winning the princess”. Opportunities can be entering new markets, launching a new technology, etc. What we need to keep in mind, however, is that these strategies work only if they are clearly defined, communicated and made relevant to everyone in the organisation.

Even highly successful companies frequently become complacent and lose their way….

This is because most leaders know how to unleash energy, but few know how to systematically sustain it. Leadership activities designed to increase your organisations’ produc- tive energy and make it the market leader are fundamentally different from those needed to have your company stay on as number one. As a leader you need to establish and build a strong management system for sustaining productive energy and building a network of batteries throughout the company. Rather than relying on a few individuals who identify the challenges or opportunities and energise the rest of the organisation from the top, it is better to build systems with many batteries. Ideally, what we need is a working environment where people are constantly stimulated, encouraged and asked to challenge the status quo.