Change Your Employees' Minds, Change Your Business

Many business leaders don't care why employees do anything as long as they follow the company's rules, processes, cultural norms and laws. But we've found that leaders can create and sustain stronger business results if they understand — and manage — how employees approach their work every day. When employees' thoughts, feelings, and beliefs are aligned with their daily work, they do that work better. Leaders, though, can be squeamish about approaching topics many think are better left to psychologists, so they don't even try to create alignment.

In the work underlying Beyond Performance, we found a technique we call 'laddering' that even the most hard-nosed business operators can feel comfortable with; the reason is that it closely resembles the "five whys" approach lean organizations use to get to the root causes of performance problems. Laddering mirrors the five whys, applying it to people's mindsets instead of operational problems.

Take a classic operations example: If a motor breaks down, a lean-minded operator won't just replace it, but will ask why it broke down. "Because it overheated," comes the reply. Why? "Because it wasn't properly ventilated." Why? "Because the machine is too close to the wall." The operator thus moves the machine away from the wall before replacing the motor. Without "why," any fix would have been temporary at best, because the new motor would have burned out, too. Addressing the root cause produced a better and more durable solution. In much the same way, asking "why" about employees' mindsets gives leaders insights into how organizational performance can be better and more durably improved.

Consider a bank that discovered its sales per banker were lagging behind the competition. Its leaders headed down the traditional, process-based path: they asked "Why are sales per banker lower?" and found that bankers were not spending enough time with customers. Then they asked "Why aren't bankers spending more time with customers?" Because, they found, a significant amount of bankers' time was spent completing paperwork.

The bank's leaders had their diagnosis, and set about reengineering the loan-origination process to minimize paperwork and maximize customer-facing time. They also provided bankers with new sales scripts and easier-to-use tools so that bankers knew just what to do with the extra time with customers. The bankers were trained, the tools were rolled out, and, leaders thought, the problem was solved. Six months later, time spent with customers had changed little and sales had barely improved.

Faced with this, the bank's leaders began to ask "why" again. Why wasn't the new process working?

Through focus groups with the bankers, the bank's leaders quickly found that most of them found customer interactions uncomfortable, and preferred paperwork to people. Asking "why" again, the leaders found that many bankers were introverted, had poor interpersonal skills, had a sense of inferiority in dealing with customers with more money, and saw salespeople as hucksters, not professionals. Furthermore, their supervisors, who were mostly former bankers, were just as insecure, so they placed more emphasis on paperwork than people too.

Clearly, no new process was going to work as long as the bankers' mindsets were so opposed to the basic goal of spending more time with customers. So the bank's leaders radically revamped their change program, to include training on being aware of one's own and others' personality types, building emotional intelligence, and changing bankers' notion of being salespeople from "pushing products" to "helping customers discover and fulfill their unarticulated needs." Within six months, customer-facing time and sales improvements were back on track. The bank eventually generated significantly better results than it had aimed for, achieving a 43 percent increase in bankers' cross-sell ratio compared with a target of 20 percent.

The power of mindsets is brought home by Gary Hamel and C.K. Prahalad's story of four monkeys sitting in a cage with a bunch of bananas hanging from the roof, accessible by a set of steps. Whenever the monkeys try to climb the steps to get to the bananas, they are blocked by a blast of cold water. After a few days, the monkeys give up. Researchers then remove the water hose and replace one of the original monkeys with a new one. Seeing the bananas, it starts up the steps. What happens? The other monkeys, being social creatures, pull it down before it gets blasted with water. This happens again and again until pretty soon the new monkey doesn't bother to go for the bananas either.

Over the next few weeks, the researchers remove the rest of the original monkeys one at a time and replace them with new monkeys who've never seen the jet of water. Even though there's no longer anything to stop the monkeys from reaching the bananas, each new monkey is always pulled down by the others.

By the end of the experiment, not a single monkey has ever seen a jet of water, but none of them tries to climb the steps. They've all learned the rule that "You don't grab the bananas around here."

What ingrained employee mindsets or unwritten rules are keeping your business improvement efforts in check? Asking "why" enough times is a simple and powerful way help you uncover and deal with those mindsets in ways that will boost employee engagement and business performance.