Spending resources on how leaders and employees treat one another is often considered a waste of time and money when there’s so much work to be done, strategy to be executed, and bottom-line results to be achieved. Many leaders think that focusing on healthy behaviors and emotional intelligence skills in the workplace is soft or “touchy-feely”.
Is this the kind of culture you’re familiar with? If so, it’s keeping your organization from getting the results you’re working so hard for.
In my last blog, I talked about the difficulty of measuring how healthy behaviors contribute to a high-performing and profitable organization. In particular, we looked at how the executive leadership team’s relationships with one another effect the culture of the entire organization.
But the question remains…how do you measure it? What’s the ROI on investing in human capital, emotional intelligence skills, and company culture?
I cheered when a colleague shared with me this video of Dan Ariely, Professor of Psychology & Behavioral Economics at Duke University.
In this video, Dan describes his research that addresses the connection between how organizations treat their employees and the company’s success in the stock market. Can it get any more direct than that?
His million-dollar question? Of all the ways that a company can invest in human capital, which ways result in the highest stock market value?
For over 10 years (2006 – 2017) Dan sampled a number of businesses on various dimensions regarding the behavioral aspects of how they treat their employees.
By “dimensions” he’s referring to traits like:
How forgiving is management when a mistake is made?
How clear is the path to advancement and improvement?
Then, he watched the companies that were performing the best in the stock market. Note, he didn’t look at any of the companies financial reports or quarterly earnings. Only how companies were treating their employees and the final S&P 500 results.
Here’s what he found:
The companies that had the top stock results shared the following positive behavioral traits:
- Value of work and time
- Promote transparent management
- Commitment to follow-through
- Set clear expectations
- Prioritize a caring environment
- Value of honest mistakes
In contrast, the below list are some of the negative behavioral traits Dan found in companies that contribute to a low stock market return:
- No pride in job/accomplishment
- Inconsistent management
- Dishonest/unethical leadership
- Limited comradery/teamwork
- Low error tolerance
Dan Ariely’s research proves that investing in key positive behavioral traits increases the company’s stock market return.
His study shows that the best ways to invest in human capital are not the ‘usual suspects’ of compensation & benefit, rather behaviors that are deeply emotional and personal to employees – in particular how people treat one another and get along.
For the month of February only! You can get a 15% discount on a team assessment. Pinpoint the areas your team needs to improve in how they treat one another work together.
Based on Patrick Lencioni’s book The Five Dysfunctions of a Team, this assessment will zero in on what holds your team back from getting the culture you want and ultimately the bottom-line results you need.
Schedule a call to begin your team assessment now.
“Recognizing our shortcomings is a crucial first step on the path to making better decisions, creating better societies, and fixing our institutions.”
― Dan Ariely,
Great leadership behaves the way they want their employees to behave!