This article is written by a graduating Flow Coach
Introduction
Employee engagement is one of the most serious challenges facing organizations today. Poll after poll confirms that an astonishing number of workers are disengaged from, or not engaged in their work. According to Gallup’s latest Annul Employee Engagement 18% of employees are actively disengaged and 59% of employees are neither engaged nor disengaged. Only 23% of employees are engaged. (Gallup. 2022). This tells us that over two-thirds of employees are either proactively destroying value or they do not care enough to add or destroy value. In this paper, we explore why employee engagement and employee experience are such critical success factors for any organization today and how flow can help firms solve for this problem and improve performance at both the individual and company level.
Employee Engagement
Employee engagement is a human resources (HR) concept that describes the level of enthusiasm and dedication a worker feels toward their job. Engaged employees care about their work and about the performance of the company and feel that their efforts make a difference. Employees who are actively disengaged destroy value. Willis Towers Watson reports that organizations with high levels of engagement see operating margins up to three times higher than organizations with low engagement. Organizations with the highest levels of engagement are 22% more profitable and 21% more productive than organizations with low engagement. Most impressive is that organizations with engaged employees outperform organizations without high engagement by 202%. Conversely, the cost of employee disengagement and the associated attrition is costing companies hundreds of millions of dollars every year. According to a new McKinsey research report, in the US alone, the cost of employee engagement and associated attrition to a median-size S&P 500 company is between US$228 million and US$355 million a year in lost productivity. Over five years, this is over $1.1 billion in lost value per company (McKinsey 2023). Companies are throwing millions of dollars at this problem – the global employee engagement market totalled US$ 1.6 billion in 2022, with sales growing at a robust 9.1% CAGR, and is estimated to reach US#3.8 billion by 2032. (Future Market Insights. 2022) – but the employee engagement problem still persists. Why are most organizations’ efforts to improve employee engagement not working?
Experience Matters
When organizations make real gains with employee engagement, it is usually because they are redesigning employee experience, and creating a place where people want, not just need, to work each day. Organizations that get employee experience right have seen massive performance gains. According to research conducted by Jacob Morgan, author of The Employee Experience Advantage (Wiley, 2017), companies that invested most heavily in employee experience were included 28 times as often among Fast Company’s Most Innovative Companies, 11.5 times as often in Glassdoor’s Best Places to Work, 2.1 times as often in Forbes’s list of the World’s Most Innovative Companies, 4.4 times
as often in LinkedIn’s list of North America’s Most In-Demand Employers, and twice as often in the American Customer Satisfaction Index. The financial data from Morgan’s research is also very compelling. Compared with other companies, the “experiential organizations” had more than four times the average profit and more than two times the average revenue.
They also outperformed the S&P 500, the NASDAQ, Fortune’s 100 Best Companies to Work For, and Glassdoor’s Best Places to Work, in addition to the other organizations by considerable margins.
Looking at the data provided by Jacob Morgan’s research as well as others, it is clear that there is a significant return to organizations that focus on employee experience.
Optimal Experience (Flow)
Optimal experience, or flow, within positive psychology, is starting to get the attention of many enlightened companies, including those “experiential organizations” described above. There is a huge body of research from around the world that shows regardless of context, culture, gender, age or education, when people feel a deep sense of enjoyment, they describe the experience in remarkably similar ways. What they are doing at the time of this deep sense of enjoyment can be quite different, but what is felt is incredibly consistent. Mihaly Csikszentmihalyi, a distinguished professor of psychology, Chairman of the University of Chicago Department of Psychology and Founder of the Quality of Life Research Centre at Claremont Graduate University coined the term flow to describe this common experience of feeling a deep sense of enjoyment. He gave the name of flow to these moments of optimal experience because he noticed that people often used the analogy of moving effortlessly in a current of energy where action and awareness follow each other spontaneously and unselfconsciously. In this sense, low can be defined as that moment when everything falls into place and happens just as it’s meant to, when you are “in the zone”, “on fire”, “flying”, and when you are in complete harmony, perfectly synchronized, and very importantly from the perspective of an employer, performing at your best (Rathunder K and Csikszentmihalyi M. (2006). What Csikszentmihalyi discovered, in his years of research into human happiness, creativity and productivity focussing on some of the most successful people across a wide range of professions, many of whom were Nobel Prize winners, is that the secret to their optimal performance was their ability to enter the state of flow frequently and deliberately. In a 10-year study conducted by McKinsey, top executives reported being five times more productive when in flow. According to McKinsey research, if organizations could increase the time employees spend in flow by 15-20%, overall workplace productivity would almost double. So, how do we get into flow and create this state of optimal experience and performance?
The Dimensions of Flow
According to research by Csikszentmihalyi and his colleagues, there are nine dimensions to flow (IESE Business School, University of Navarra. 2023):
Challenge-skills balance: This is known as the golden rule of flow. For individuals to experience flow it is not enough for challenges to be equal to skills; both factors need to be high and must stretch the individual to new levels of experience.
Clear goals: Goals direct action and provide individuals with a focus. For individual to enter flow, short-term goals need to be clearly set in advance so that the individual knows exactly what he/she is to do.
Unambiguous feedback: Clear feedback is critical for experience flow; individuals must be tuned into the feedback given by their own movements, as well as by their external environment, regarding the task they are performing. In other words, flow requires an awareness of one’s performance.
Intense concentration: When there is balance between high challenges and skills, the goals of the actively are clear and there is unambiguous feedback, individuals become engaged with the task and enter a zone of deep concentration.
Effortless action: While in flow, individuals feel that their actions are not deliberated but they feel as though their actions are automatic. They enter a state of effortless information processing. The task is performed without strain or effort to the best of the person’s ability.
Sense of control: Individuals feel they are in control of the activity they are performing. This sense of control frees the individual from a fear of failure and creates a feeling of empowerment for the challenging task to be executed.
Distortion of time: What is experienced while in flow is a shortening of time (e.g., hours pass like minutes) or the reverse (time goes very slowly).
Loss of self-consciousness: When individuals are in flow, the concern for the “social self” disappears, as no worries or negative thoughts come into the mind.
Autotelic experience: The activity become rewarding in itself. Ther is no need for external rewards as the most important rewards are found within the activity the individual is engage in.
These dimensions can be organized into antecedents (challenge-skills balance, clear goals and unambiguous feedback) and the experience of flow (intense concentration, effortless action, sense of control, distortion of time, loss of self-consciousness, autotelic experience). In short, when the challenge-skill balance is high and matched, and the goals and feedback are clear, we are ready to experience flow. Our attention is ordered and fully invested into the task. Now fully absorbed, our concentration level is intense, effort becomes effortless, we feel in complete control, fear of failure and self-consciousness disappears as does our sense of time and are left with this sense of joy of doing the activity in which we are fully engaged. In this state of flow, where physical and psychic energy are in harmony, we are able to achieve so much more than we ever imagined. It is in this state that CEOs are five times more productive, athletes break world records and artists create their best work.
Experiential Organizations Embracing Flow
An increasing number of organizations are attending to employee experience and aligning firm culture at the top of the house as a well as talent management practices throughout the firm with the principles of flow. Examples include:
Google: Google is famous for its "20% Time" policy, where employees are encouraged to spend 20% of their work hours on projects of their choosing. This initiative aligns with the principles of flow by allowing employees to pursue tasks that match their skills and interests. As a result, employees at Google have the freedom to immerse themselves in projects they are passionate about, leading to remarkable outcomes. Products like Gmail and Google News were born from this initiative, showcasing the tangible benefits of allowing employees to experience flow. Google's innovative culture, fostered by the "20% Time" policy, has contributed to its status as a global technology leader.
Zappos: Zappos' Holacracy Approach: Zappos, an online shoe and clothing retailer, has embraced a unique organizational structure called Holacracy. This approach empowers employees to take on various roles and responsibilities within the company based on their interests and skills, thus promoting flow experiences. By giving employees the autonomy to shape their work experiences, Zappos has not only achieved elevated levels of employee engagement but also improved overall performance. The company's customer-centric culture, driven by employees experiencing flow, has resulted in exceptional customer service ratings and long-term customer loyalty.
Toyota: Toyota's Lean Manufacturing: Toyota's implementation of the lean manufacturing philosophy is another example of flow principles in action. By optimizing production processes and
minimizing waste, Toyota creates an environment where employees can focus on their work
without disruptions. This approach has led to increased productivity, higher product quality, and cost savings. Toyota's commitment to fostering flow within its production lines has made it a leader in the automotive industry for decades.
Netflix: Netflix's Freedom & Responsibility Culture: Netflix is known for its unique company culture that promotes employee autonomy and decision-making. They have a philosophy of "freedom and responsibility," which allows employees to have a high degree of control over their work. This approach aligns with flow principles by giving employees the freedom to choose tasks and projects that they are passionate about and that match their skills. As a result, Netflix has seen remarkable success in content creation and streaming services. The company's innovative culture has led to the creation of critically acclaimed shows like "House of Cards" and "Stranger Things."
Patagonia: Patagonia's Approach to Work-Life Balance: Patagonia, the outdoor clothing and gear company, has been a pioneer in creating a workplace that supports work-life balance and flow experiences. They offer flexible work schedules, encourage employees to pursue outdoor activities, and provide opportunities for personal growth. Patagonia's commitment to fostering flow has resulted in high employee satisfaction and loyalty. This, in turn, has translated into strong brand loyalty from customers who appreciate the company's values. Patagonia's approach to work-life balance and flow has contributed to its reputation as a socially responsible and environmentally conscious brand.
Atlassian: Atlassian's ShipIt Days: Atlassian, a software company known for its products like JIRA and Confluence, holds regular "ShipIt Days," where employees are given 24 hours to work on any project they choose. These events promote creativity and innovation, allowing employees to experience flow while tackling projects outside their usual work. Many of Atlassian's successful product features and improvements have emerged from ShipIt Days, demonstrating how flow experiences contribute to product innovation and success.
Green Cargo: Csikszentmihalyi’s book on flow is required reading for all managers as part of their training program. With the goal of establishing clear goals and unambiguous feedback (two of the antecedents of flow), employees and managers meet and negotiate three-months contracts and organise feedback sessions once a month. A year after this implementation, Green Cargo substantially increased its profits.
Conclusion:
No organization sets out to have over 50% of its employees not engaged in their work. It is where most organizations find themselves, however. As long as organizations, from the board and CEO down, keep focussing on performance at the expense of employee experience, employee engagement will continue to be a fundamental problem and firms will not reach the performance levels other more enlightened experiential organization are achieving. In the words of Mihalyi Csikszentmihalyi, “Optimal experience is something you make happen.”
For more infomormation on Steven McCrindle see https://www.linkedin.com/in/steven-mccrindle-4a015013/
References:
(Gallup, 2022) – Gallup.com – Employee Engagement
(McKinsey, 2023) - McKinsey Quarterly - Some employees are destroying value. Others are building it. Do you know the difference?
(Future Market Insights, 2022) – Futuremarketinsights.com – Employee Engagement Market
(Wiley, 2017) Jacob Morgan is the author of The Employee Experience Advantage
(Rathunder K and Csikszentmihalyi, 2006) – The Developing Person: An Experiential Perspective
(IESE Business School. University of Navarra, 2023) – The Science Behind Flow at Work
(Csikszentmihalyi, 1997) – Finding Flow. The Psychology of Engagement with Everyday Life.
(Csikszentmihalyi, 2004) - Good Business: Leadership, Flow, and the Making of Meaning.
