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Wednesday, October 1, 2014

The Best Vacation Policy Is No Policy

By Jane Miller, Chief Operating Officer

Virgin Group Founder and Chairman Richard Branson’s announcement last week that he is giving his staff unlimited vacation days has certainly raised a few eyebrows. Critics question whether employees will abuse the unlimited vacation days “policy” and whether that will harm business. Other skeptics wonder if this policy, or lack thereof, will result in hard-charging employees to not take any time off and will become a detriment to their engagement or well-being.

My opinion is that Branson is onto something we here at Gallup discovered decades ago. For the past 40+ years, Gallup has had an open vacation/time-off policy. Starting in the 1970s with a base of just 50 employees -- and expanding to more than 2,300 today -- we have made it work for both our associates and, most importantly, our customers. An open vacation policy may not be practical for all industries or types of businesses, but where it is possible, it is actually a good thing for associates and the business if managed appropriately. 

Based on our experience, here are five things we have learned that can make this vacation “policy” work for both customers and associates:

1. Hire associates with the “right fit.” When you hire an associate for their talents, skills, and strengths you are more likely to hire a person who is engaged in their work and who takes psychological responsibility for their customers, peers, and the work to be accomplished. A person who is a right fit and resonates with their job hates to let others down, and so they will perfectly communicate when they are available or when they need to be out of reach. They will also assume responsibility for ensuring their work is done, or that a plan is in place for a coworker to complete whatever may need to be done while they are out of the office.

2. Select great managers. Great managers, not just any average manager, find a way to help people do what they do best in their jobs, while also helping their staff achieve high well-being. If a person thinks vacations or time spent with family are what inspires or motivates them to do better at their job, then a great manager will work to help them find a way to take time to travel or to be with their kids or elderly parents. Great managers resource employees to their strengths, their ambitions, their performance, and their outcomes. Done right, managers can juggle all schedules to make this policy work for the individual, the clients, and the company.

3. Focus on performance metrics and outcomes, and then hold managers and associates accountable. This includes how you pay them and what is expected to retain a job or become promoted. There are 8,760 hours in a year, and a company may get 1,800 of those or perhaps they get 3,000 of those from every individual associate. If pay and titles are commensurate with the performance expectations and outcomes, the associate should be able to choose how they spend the other 5,760-6,960 hours. Encouraging and empowering associates to take what they need or want is the most powerful outcome of this vacation policy -- some associates literally don’t want to spend the money or be away from home, others want to be gone every weekend, and yet others want that time to leave early to be with their kids.

4. Focus on the hours an associate is working and not on the times when they are not. Set a goal for a total amount of hours for the associate to work that year, appropriate to their position, and let them accrue those hours in a way that best suits them and their clients. A general guideline of two weeks for new associates with a day added for each year after two years can be used when calculating the right amount of vacation time annually. However, clearly state to employees that in any one year they can take more time if they need or want to, and that this is just a guideline. There will be weddings, anniversaries, milestone birthdays, deaths, and kids’ activities, and it can vary from year to year. The most important guideline to keep in mind is what your associates accomplish in their jobs.

5. Expect customer centricity. The end result should always be service and impact for clients. If associates know who they are servicing and for whom they are creating impact, and if they are held accountable by a great manager who similarly holds the entire team accountable, the client or business will never miss a beat. With many online scheduling and resourcing tools available for projecting hours, deadlines, and full-time equivalent needs, it is easier than ever to make this work.

Have we ever had anyone abuse it? Yes, but I can count the number of employees on two hands in 30 years. Have we ever had anyone not take enough time away? Rarely, but a handful abstain from time off either due to their choice to save the money or not wanting to leave work. It is rare. Have we had people cite it as a reason for leaving? Yes, a few, but they weren’t the type of associates that fit our culture of trust, transparency, and partnership, and they didn’t have the relationships or performance to make the policy work. The positives and advantages to this policy significantly outweigh the disadvantages. After all, your most talented and intense hard workers are usually the ones that believe in the mantra “work hard, play hard.”

It’s all about great managers who set the right expectations and then manage the outcomes. With that, this nouveau form of vacation policy can be a huge recruiting, retention, and engagement advantage as well as great for a human’s well-being. It is just the right thing to do.

Tuesday, September 30, 2014

How to Identify Future Entrepreneurs

“If you have a high IQ, America’s massive testing systems will find you…If you have the rare, innate talent to play basketball or football, our massive youth-to-college-to-pro sports systems will find you…However, if you have the rare, innate ability to create a customer, to build a company -- if you have the talent for entrepreneurship -- your early identification and subsequent development is left to chance.”

That’s the problem that Gallup’s Chairman and CEO Jim Clifton and primary researcher on Gallup’s Entrepreneurship and Job Creation initiative Sangeeta Bharadwaj Badal, Ph.D., address in their new book, Entrepreneurial StrengthsFinder, which hits bookshelves and online book retailers today.

To help identify who has what it takes to be an entrepreneur, Gallup studied more than 4,000 entrepreneurs over the last five years in the U.S., Germany, and Mexico to understand the role of talent in entrepreneurial performance. Gallup discovered 10 innate talents that highly successful entrepreneurs possess:

  1. Business Focus: You make decisions based on observed or anticipated effect on profit.
  2. Confidence: You accurately know yourself and understand others.
  3. Creative Thinker: You exhibit creativity in taking an existing idea or product and turning it into something better.
  4. Delegator: You recognize that you cannot do everything and are willing to contemplate a shift in style and control.
  5. Determination: You persevere through difficult, even seemingly insurmountable, obstacles.
  6. Independent: You are prepared to do whatever needs to be done to build a successful venture.
  7. Knowledge-Seeker: You constantly search for information that is relevant to growing your business.
  8. Promoter: You are the best spokesperson for the business.
  9. Relationship-Builder: You have high social awareness and an ability to build relationships that are beneficial for the firm's survival and growth.
  10. Risk-Taker: You instinctively know how to manage high-risk situations.
Based on these talents, Gallup created the Entrepreneurial StrengthsFinder, the first-ever comprehensive assessment that identifies who has what it takes to start and build a big business. The online assessment helps coaches, mentors, and city leaders to grow entrepreneurship in their communities; students and employees to figure out whether entrepreneurship is the right path; entrepreneurs to look for insights into their behaviors that can drive business outcomes; and investors to find the best candidate on which to bet.

Clifton explains that it is a critical time to start finding and developing future entrepreneurs. For the first time in 35 years, American business deaths now outnumber business births. And entrepreneurship is now in decline for the first time since the U.S. government started measuring it.

Clifton tasks city leaders with identifying and developing highly talented entrepreneurs, because most economic activity of importance occurs at the city level. “Each city needs its own highly individualized plan because each city has its own unique entrepreneurial talent – and each must find it, maximize it, and retain it,” says Clifton. “Early identification of rare entrepreneurial talent will be the most significant turning point in recent human history.”

Order Entrepreneurial StrengthsFinder.

Friday, September 26, 2014

Successful Relationship Managers Are Partners to Their Clients

By Scott Vanderbilt

This post is part of Gallup's ongoing series on the shifting landscape for financial institutions. It provides insights into channel optimization, emerging customer behaviors and preferences, product penetration and relationship growth, engaging the most critical affluent and business customers, and reshaping banks' overall value proposition.

FOCUS ON FINANCIAL
SERVICES
View more posts >
The keys to success in any relationship -- whether romantic, business, or otherwise -- include both communication and action. This holds true in financial investing as well, where the relationship between the Relationship Manager (RM) and the customer can take one of two paths: 1) a successful path where both parties understand and trust each other, or 2) an unsuccessful path where communication and trust drop to subterranean levels and contribute nothing positive to the financial bottom line.

Gallup’s 2012 Mass Affluent Investor study revealed that successful RMs do more than just take orders. Instead, they actively contribute to their relationships with customers and have significant influence on customers’ feelings of success. More than half (56%) of mass affluent investors were satisfied with their RM while nearly three-quarters (71%) of successful mass affluent investors were satisfied with their RM. For those who attribute that success to their advisors in the latter group, the RM satisfaction rating soared to 87%. This speaks volumes about the RM role in investing, as the most successful investors were also the most satisfied with their financial partners.

The data aren’t saying that RMs need to be important fixtures in their customers’ lives. Rather, they just need to be an important fixture in their customers’ financial investing lives. The overarching themes of investing success are communicating with customers and being knowledgeable about investing. When RMs act on these themes they build trust, confidence, and feelings of reliability with their customers. RMs must also deliver on their commitments. If they make a promise, they have to fulfill it. For example, if an RM says they are going to review a customer’s portfolio for any changes, then they should present their recommendations by the deadline.


RMs who make their customers feel successful received high ratings in the following categories:

1. Inspires confidence. RMs have to act as their customers’ cheerleaders but, most importantly, they have to provide advice and recommendations that make sense to their clients. If customers feel their RM is making the right suggestions that closely match their needs and goals, then they will experience an uptick in satisfaction. Customers have to see that their RM is not just reading tea leaves, but that they know how investing works.

2. Provides the best possible financial advice. Along those same lines, customers are looking for the best advice. If the RM doesn’t provide them with the best advice, why should they even bother with the relationship? What would the RM have to offer? Advice is often packaged with communication, meaning RMs have to listen to customers’ needs and offer suggestions to satisfy those needs.

Trusted RMs ranked high on successful investors’ rating sheets. But when we examine the importance of the advisor in an investor’s success, we found that following through on commitments was one of the strongest factors in that success.
 
3. Delivers on commitments made to you. If the RM makes a commitment to the customer, they should stick to it. Customers rely on their RM to provide everything they need to be successful. RMs that deliver on those commitments become that important piece of the successful investor process. In other words, when customers say that advisors were an important part of their financial success, delivering on commitments stood out among the other factors that differentiated these advisors from everyone else.
 
RMs need to be there for their clients and give them the tools that they need to be successful. Clients are looking for that partnership, rather than the more common banker-customer relationship. 

Wednesday, September 24, 2014

In Australia, Student Engagement Dips With Each Year in School

By Peggy Jasperson, Consultant

We have a major problem plaguing Australia’s schools with implications that are frightening for the future of our country. Gallup research suggests that Australian students become less engaged as they make their way through the school system. In other words, the longer students stay in school, the less involved with and enthusiastic about school they become.

Through the second administration of Australia’s Gallup Student Poll, we surveyed a convenience sample of more than 5,000 students in Years 5-12, in 24 schools across six states. We found that about three-quarters of Year 5 students who participated in the poll are engaged in school. This plummets to 58% in Year 8. By Year 12, only about half of students are engaged. 


What may be contributing to this engagement drop is that students who took part in the poll feel their schools are less committed to building their strengths as they progress through school. While nearly two-thirds of Year 5 students “strongly agree” that “their school is committed to building the strengths of each student,” only 45% of Year 8 students and one-third of Year 12 students say the same.


These findings are the complete opposite of what we would want for the future leaders of this country. Students should become more engaged in their education and better equipped to use their strengths as they progress through school, not less. Sadly, the results suggest that we are failing to build on what students naturally do well, and are therefore not setting them up for success.

Education leaders have already laid the foundation for focusing on students’ strengths. The Australian curriculum has a component that encourages school leaders to foster the development of “personal and social capability” within students. This takes students beyond academic success and pushes them to better understand themselves and others, make responsible decisions, work better in teams, handle challenging situations constructively, and develop their leadership skills.

But we clearly need to do more. If we insist that all students approach situations in exactly the same way, students will never truly develop their natural abilities and reach their full potential. We need to take a differentiated approach to teaching and learning to help our students develop their strengths.

Graham Anderson, principal at Arden Anglican School, agrees that this approach can net multi-faceted benefits for a student’s immediate and not-so-immediate future. “For students to know their own strengths and for staff to be able to engage with them using a common language of strength recognition benefits students. It means that the staff is focusing on and encouraging student engagement and deeper learning, in both the current academic program and later in life.”

Geoff Brisby, principal at Heritage Christian School, has witnessed positive outcomes as a result of using a strengths-based approach in his school since 2011. “A strengths-based approach is now woven deeply into our school’s culture. We have seen staff and students demonstrate increasing levels of hope, learn to appreciate themselves as individuals, and recognise how each person’s strengths contribute to the overall health of the school community.” This experience, according to Brisby, has been truly transformational.

Gallup Student Poll results suggest that Anderson and Brisby are on target. If educators modify the way they conceptualise and deliver lessons to take their students’ individual strengths into account, they can significantly boost student engagement. In fact, Gallup Student Poll results reveal that the 23-percentage-point dip in student engagement between Year 5 and Year 12 students narrows to nine points among students who feel that their school focuses on building their strengths.


To create a culture of strengths and set future leaders of this country up for success, principals and teachers should:

•Develop a strengths-based philosophy on campus and encourage teachers to spend as much time focusing on and building the strengths of each student as they do on academic outcomes.

• Identify the strengths of each student and focus on them. Beyond asking students to say what they think their strengths are, teachers can look for the following:
  1. when students experience “flow,” the feeling of time disappearing because they are lost in their work
  2. when students are most energised in their lessons and activities
  3. where students show glimpses of excellence
  4. where students learn rapidly and are excited to do more
• Incorporate strengths-based language into assignments and student interactions to give students more opportunities to focus on their strengths every day.
 
• Track their school’s progress on its strengths journey by annually measuring student levels of hope, engagement, and well-being.

Albert Einstein once said, “Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.” If we focus on students’ weaknesses, they will feel like these poor fish. If we want to want to keep students engaged in school and ensure our country’s future, we need to focus on their strengths.

To learn more about the Gallup Student Poll in Australia, visit www.gallupstudentpoll.com.au or call +61 02 9409 9000.

A version of this article was featured in Education Review.

Tuesday, September 16, 2014

Sales Conversation Framework Yields Results for Banks

By Jon Hughes

This post is part of Gallup's ongoing series on the shifting landscape for financial institutions. It provides insights into channel optimization, emerging customer behaviors and preferences, product penetration and relationship growth, engaging the most critical affluent and business customers, and reshaping banks' overall value proposition.

FOCUS ON FINANCIAL
SERVICES
View more posts >
We recently shared a framework we developed to help banks turn everyday transactions into sales conversations. The framework, which moves from conversational foundations and basic assistance to a more holistic focus and an overall financial vision, can be implemented for all key customer-facing roles (tellers, bankers, contact center agents, relationship managers, etc.) across a variety of product types and customer segments. Each specific conversation and situation dictates how far up the framework a bank associate should proceed with a customer. Not every conversation should involve an in-depth discussion of the customer’s financial future, but ideally all relationships should get to that point over time.

Of course, we know that consulting is littered with well-intentioned frameworks that fail to make a real-world impact on their intended audiences, and they fail for a variety of reasons. One reason, unfortunately, is that frameworks can be highly logical and appealing in the conceptual world only, and don’t translate very well to real-world situations. That isn’t the case here. When we tested this conversational framework in one of our recent retail banking industry studies, we found strong evidence that these key conversational elements lead to two important outcomes: 1) a highly satisfying customer experience, and 2) increased sales.



When implementing a sales program with our banking clients, the hierarchical nature of the framework tends to remain quite constant -- even though the specific elements at each level of the framework are customized to fit the client’s unique situation. While some customers in some situations require very little from the banker to open an account -- the quintessential “low-hanging fruit” -- banks (and customers) will see significant benefits when the conversation is elevated to the higher levels of the framework.

Low-Hanging Fruit: Even when bankers don’t perform any of the conversational elements particularly well (scoring a 3 or less on a 5-point scale), slightly more than half of banking customers still tell us that they opened an account, purchased a product, or added a service during that visit. In other words, these customers represent the classic low-hanging fruit -- customers who come into the branch (for example) with the express purpose of obtaining some kind of product. These customers typically don’t require a terribly in-depth or even well-executed conversation with their banker. What we do notice, however, is that despite purchasing something that day, they aren’t very satisfied with the experience -- only 19% rate it a “5” on a 5-point scale. It’s quite likely that these bankers left something on the table that day in terms of additional sales and hurt their chances for future sales.

Solid Foundation: If bankers are able to build a solid foundation during the conversation, they see immediate dividends. When customers rate foundational elements highly -- bankers properly frame the discussion, ask appropriate questions, and dispense useful advice -- we find a noticeable increase in the likelihood of sales (from 56% to 61%) and in customers being extremely satisfied with the interaction (from 19% to 39%).

Pyramid Power: The better the banker is able to execute on the more complex, holistic, and visioning elements -- the higher levels of the conversational pyramid -- the more likely they are to garner a sale during that conversation. And the payoff is greater at each successive level of the pyramid. While the likelihood of a sale increases more modestly from 56% when none of the elements are done well to 61% when only the basics are executed, that likelihood increases to 67% when the conversation is also holistic in nature, and further to 78% when the conversation includes financial vision (e.g., educating the customer on their financial potential or how their needs may change over time). So, while not every sales conversation will (or should) reach the financial vision pinnacle, it remains a worthwhile -- and bottom-line focused -- goal for all relationships.

Shared Success: While banks (with good reason) are drawn to the sales impact presented here, it is important to note that when a banker executes all elements of this framework successfully, both sales and customer satisfaction are maximized. Not only can the bank and the banker feel good about delivering more sales for their organization, they can also feel good that they are delivering a more positive experience for the customer, which can be an important element of the organization’s overall mission and branding. Associates can talk about “meeting customer needs” and delivering an “exceptional customer experience” as opposed to the more sterile, internally-focused “selling more.” Of course, if a customer is more satisfied with their conversational experience, they will also be more likely to consider that bank and that banker the next time they need a financial product.

Monday, September 8, 2014

Blended Learning Can Benefit Students If It Is Done Right

By John H. Pryor, Gallup Senior Research Scientist

One of the hottest topics in education in recent years has been Massive Open Online Courses (MOOCs), which deliver all content through the Internet. Depending on who you listened to, it seemed like MOOCs were going to be both the savior and the death of higher education. It turns out they were neither.

In fact, discussions about MOOCs and the best way to deliver online content has seemingly bolstered another teaching method that has been used in educational settings for years: blended learning. Blended learning, also referred to as hybrid courses, is defined as traditional face-to-face classes that incorporate online materials and lectures that students can access at their convenience. 

In the most recent Gallup-Inside Higher Ed Survey of College and University Presidents, Gallup presented college presidents with a list of 13 topics that have been in the news frequently in the past year and asked if these topics had been discussed on campus, if they resulted in some action on campus, or if neither discussion nor action were underway. Nearly all presidents surveyed said they discussed blended learning on campus (97%), and 87% were also taking action regarding blended learning. By contrast, 54% said they discussed MOOCs, and only 15% had taken action around MOOCs. Clearly, blended learning is winning the day. 

Moreover, college presidents are significantly more likely to say that blending learning, rather than MOOCs, will have a positive impact on their institution. Half of college presidents surveyed reported that blended learning would have a very positive impact (50%) and an additional 44% forecast a “somewhat positive” impact. On the other hand, just 3% of college presidents thought MOOCs would have a very positive impact on their institution.

These results suggest that we will likely see more traditional classes transformed into blended learning classes in the years ahead. This shift toward blending learning could benefit students tremendously, but only if university leaders and faculty make the most of it.

In a blended learning model, students watch at least some lectures outside of the classroom. Two things can happen here. If the motivation is simply to cut costs, then the time that faculty members previously spent lecturing may be dropped from the class schedule. If, however, the move to a blended learning model is driven by a desire to increase student learning, professors can use this extra time to interact with students.

If faculty and students make the most out of the time they would have otherwise spent in lectures, it could contribute to students having a great job and a great life after college. Research from the Gallup-Purdue Index shows that student who feel supported in college are more likely to be engaged in their work and have higher levels of well-being after graduating. Being supported in college, we found, meant having the following three things:

  1. A professor who made students excited about learning;
  2. A professor whom students felt cared about them as a person; and 
  3. A mentor who encouraged their hopes and dreams.
Unlike MOOCs, blended learning allows students to interact with professors in more meaningful ways, thus increasing opportunities for students to cultivate strong relationships with professors and potential mentors.

Just as many college presidents expect, blended learning can have a positive impact on colleges. But will that impact come in ways that Gallup knows are linked to the most important college outcomes: having a great job and a great life? Or will it impact the balance sheet? Certainly, both better student outcomes and lower college costs are needed. If some colleges choose the balance sheet, will those savings be passed on to students in the form of reduced tuition or shifted to some other college cost center? How a college president deals with such decisions can tell us a lot about their priorities.

For more tools and advice to help teachers, students, and schools succeed, visit Gallup’s Education Knowledge Center.

Thursday, September 4, 2014

Looking Out for Customers’ Financial Well-Being Is Table Stakes for Banks

By Beth Youra

This post is part of Gallup's ongoing series on the shifting landscape for financial institutions. It provides insights into channel optimization, emerging customer behaviors and preferences, product penetration and relationship growth, engaging the most critical affluent and business customers, and reshaping banks' overall value proposition.

FOCUS ON FINANCIAL
SERVICES
View more posts >
A colleague recently asked me why I always say that the most important aspect of the banking-customer relationship is demonstrating an interest in improving the customer's financial well-being. He made good points about this being difficult for banks to do and seeming more like an outcome metric than a starting point. While I could see where he was coming from, the more I thought about it, the more strongly I felt that financial well-being should be a cornerstone of every bank-customer relationship. Our research shows that 36% of customers feel that their bank is looking out for their financial well-being. That percentage should be higher for one major reason -- “demonstrating an interest in improving the customer’s financial well-being” is strongly tied to customers’ confidence and engagement with their primary bank and therefore to the bank’s bottom line.

Confidence is the first building block of customer engagement. As we previously discussed, “demonstrating an interest in improving the customer’s financial well-being” is the biggest driver of consumers’ confidence in their banks. Customers who say their bank looks out for their financial well-being are also much more likely to be fully engaged with their bank, leading to better financial outcomes for their bank. In terms of more lucrative services, these customers have a 13% higher penetration in credit products and a 22% higher penetration in investment, insurance, or advisory products.


Customers who feel that their bank looks out for their financial well-being are also more likely to “strongly agree” that their bank is the only company they need to meet their financial needs and that they will use it for the rest of their lives.


So yes, looking out for customer’s financial well-being can be a difficult, but not impossible, goal. But in terms of long-term growth of a bank’s bottom line, it is also absolutely necessary.

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