Reading this article in The New York Times about the mood in New Orleans now that its football team, the Saints, is in the Super Bowl, got me thinking about employee engagement. The article identifies a factor that has boosted the morale of New Orleans residents. It is a factor that has a positive impact on employee morale, too. What is it?

The answer is: winning (or, to describe it in a business context, "better business outcomes").

Research has shown that better business outcomes produce a higher level of employee engagement.* That makes sense. When a group is winning, it boosts the status of its members. They feel better about themselves because they're winners. They are more cooperative with one another, feel more connected to the organization and their fellow members and this further enhances performance. It creates a spiral up in performance.

In contrast, poor business outcomes bring about stress and, in many individuals, feelings of inferiority. Mood and cooperation decline, incivility increases, all of which have a negative effect on performance.

We all know that winning is not always lasting. This year's Super Bowl champion may or may not make the play-offs next year. And we also recognize that winning in business is even harder to do in a tough economy. It is in times like these that boosting employee engagement is even more critical. In fact, it is essential to counter this downward spiral. With recent research from the Corporate Executive Board showing that 90 percent of employees are not engaged in their jobs or not aligned with strategy, employee engagement should be at the top of every leader's list of priorities. Research has shown that employee engagement is positively correlated with business outcomes. Engaged people persevere through the challenging times and oftentimes the level of employee motivation determines whether an organization lives or dies.

Today, organizations are keeping a close eye on the bottom line and many are not investing in employee engagement at a time when they most need it. This is unfortunate. Putting employee engagement and alignment processes in place is a best practice and inexpensive. Don't be penny wise and pound foolish. Every organization should train managers so they know how to engage employees, implement an employee engagement survey, and hold managers accountable for results. Failing to do so will ensure organizations will not play at the top of their game during good times and will contribute to their underperformance in difficult times like today.

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Michael Lee Stallard speaks, teaches and writes about leadership, employee engagement, productivity and innovation at leading organizations including Google, GE, NASA, Lockheed Martin, General Dynamics and the Darden Graduate School of Business at the University of Virginia. Michael wrote the guest editorial for Talent Management magazine's February 2010 edition and recently his article on how the force of connection boosts productivity and innovation was featured as the lead article in the UK's Developing HR Strategy Journal. Click on these links to learn more about Michael and Jason in the media and their speaking engagements.

*Benjamin Schneider, Paul J. Hanges, D. Brent Smith, and Amy Nichole Salvaggio, “Which Comes First: Employee Attitudes or Organizational Financial and Market Performance?” Journal of Applied Psychology 88, No. 5 (2003): 836-51.

Do you ever wonder how past leaders could have missed what seems so obvious in hindsight? Sadly, most leaders live in an environment that makes them vulnerable to managerial failure. The problem lies in a little-recognized reality of leadership: isolation. Leading can be lonely. Typically leaders have few, if any, high-trust relationships at work. Because leaders have the power to make or break the careers of those around them, people are afraid to be honest with them and challenge their thinking. Likewise, too often leaders are reluctant to let their guard down out of fear of losing the respect of their colleagues.

The consequence of this mutual fear to fully communicate is that it creates what I describe as Knowledge Traps -- barriers that prevent leaders from hearing potentially valuable information. Today’s world is too complex for leaders to think they can make superior decisions without the benefit of the knowledge held by members of their community who are closer to the front lines. When leaders are isolated from the candid dialogue that helps produce the best decisions, that isolation makes them more vulnerable to hubris and rationalization. If leaders only hear the good news that people think they want to hear, they will believe that all is well (as the emperor with no clothes did)…when in reality it is not. And of course, the undisclosed negatives will eventually come to the surface, usually when it’s more difficult to deal with them.

The isolation of leaders, with its adverse effect on decision-making, is one reason why the French political philosopher Montesquieu recommended the separation of powers, and checks and balances in government in his 1748 masterpiece The Spirit of the Laws. His solution to the pitfalls of power was embraced by America’s Founders and has since become a part of the structure of democratic governments worldwide.

In corporations, independent directors provide a check on the CEO’s power. That’s not enough, though. There are important practices that can be put in place to protect leaders at every level from the danger of isolation. All leaders should have trusted people in their lives who will provide the open dialogue and constructive confrontation required to sharpen and check their thinking. Ideally, they should have a minimum of one high-trust relationship inside their organization and one outside. This will allow them to create an inner circle with whom to grow in life and in leadership.

Additionally, leaders must develop the habit of actively seeking broad input and considering the feedback they receive before making important decisions. Implementing these practices throughout an organization – developing high-trust relationships and broadly seeking relevant knowledge before making important decisions – will help to eliminate Knowledge Traps and restore the healthy Knowledge Flow that every organization needs to make optimal decisions.

There is a new breed of leader emerging today: the leader who is accountable and growing through the power of community. The younger generations aren’t looking for know-it-all bosses. They are looking to be inspired by leaders who are growing and who encourage others to follow their example. Do you have high-trust relationships? If you don’t, take a moment to call and schedule a time to meet with someone who could be in your inner circle. It is a leadership best practice that will benefit you and the people you lead.

Michael Lee Stallard speaks, teaches and writes about leadership, employee engagement, productivity and innovation at leading organizations including Google, GE, NASA, Lockheed Martin, General Dynamics and the Darden Graduate School of Business at the University of Virginia. Most recently, Michael and his colleague Jason Pankau filmed a 90-minute program for Linkage's Thought Leaders Series that will be released in January of 2010. Michael wrote the guest editorial for Talent Management magazine's January 2010 edition and last month his article on how the force of connection boosts productivity and innovation was featured as the lead article in the UK's Developing HR Strategy Journal. Click on these links to learn more about Michael and Jason in the media and their speaking engagements.

I highly recommend seeing The Blind Side, a movie about Baltimore Ravens’ offensive tackle, Michael Oher. It’s worth the price of the ticket alone to see Sandra Bullock’s tour-de-force performance as Michael’s adoptive mom, Leanne Tuohy. What I especially like about the movie is that it shows how the right social environment helps people thrive in life.

I don’t want to give away the story so let me just say in a nutshell that it was Leanne Tuohy who reached out to Michael. It would have been easy for her to ignore him, but she didn't. Instead, Leanne felt compassion for a young man who was wearing shorts in the winter and hanging around a high school gym just to stay warm. She took the time to get to know him and his life's story. While others saw him as “Big Mike,” a quiet, giant, African-American young man from the Memphis ghetto, Leanne Tuohy saw him as a thoughtful boy with a big heart and protective instincts to match. She called him "Michael," a name he much preferred to "Big Mike." Leanne's insights helped Michael discover who he really was deep down inside and who he could become. These insights helped Michael see himself as a protector who "has the back" of his family and those he loves. It should come as no surprise then to learn that Michael Oher thrived in football as an offensive tackle responsible for protecting his teammates from the defense.

The Blind Side shows how the social environment we live in shapes us for good or ill.  Research in social psychology and neuroscience have proven this. To learn more, check out this article from the Atlantic magazine entitled “The Science of Success.” For those who want to dig even deeper into the effects of social environment on people (and especially on the young), I highly recommend watching the video presentation and purchasing the Hardwired to Connect research report based on a research study by Dartmouth Medical School, the YMCA and the Institute for American Values. In addition, I recently did a free webcast for ASTD on neuroscience and its implications for leadership that you can download by clicking here.

The social environment we live in at work affects us too. Is your work environment helping you thrive or killing you? I wrote the book Fired Up or Burned Out to help people understand how important the social environment at work is to employer brand, employee engagement, productivity, innovation and ultimately the performance of individuals and organizations. If your social environment at work is toxic or even indifferent to people, you can do something about it. A good first step is to read the manifesto I wrote for ChangeThis.com. You can find it and download it free along with other articles, podcasts and webcasts, by clicking here: The Connection Culture: A New Source of Competitive Advantage. To go even deeper, read Fired Up or Burned Out and share it with your colleagues, family and friends.

If you are in a country where it is impossible to purchase the book because the values it promotes are threatening to those in power, email me at mstallard@epluribuspartners.com and I'll email you a free pdf version of the book. Recently, I've received requests from individuals in nations with oppressive governments and I'm delighted to share the book with people who are trying to improve the social, political and economic environments of their home countries.

When leaders create a healthy social environment, it helps protect them from their blind side which is often the morale of the people they lead and what's really happening in the organization (or nation). Absent a healthy social environment, nations and organizations inevitably fail when the vast majority of people who feel disconnected lose hope in their leaders and the future. A healthy social environment, what I call a "Connection Culture," keeps everyone feeling connected and like they are part of the group so that all thrive.

Last week I did a webcast for members of the America Society for Training and Development (ASTD). The webcast covers select research findings from the field of neuroscience and their implications for leadership, productivity, innovation and employee engagement. ASTD is the world's largest association dedicated to workplace learning and development professionals.  The webcast and slides are available at this link. (Note: clicking on the link will begin an automatic download of the webcast and slides.)

I just returned from speaking about values-based leadership, employee engagement, productivity and innovation to students and faculty at Illinois State University. Here is a link to an article on my presentation. While visiting my alma mater, I had the good fortune of interacting with Dr. Jim Jawahar, the Chair of the Management and Quantitative Methods Department, and several of the department's outstanding faculty members. During the discussion, we identified several areas of shared interest. Starting today and over the coming weeks I'll be writing about what I learned.

To begin, Assistant Professor Dr. Laura Erskine has done some fascinating research on leading employees via online, virtual interactions. In a thought-provoking article published by my friends at the Center for Creative Leadership, Dr. Erskine wrote: "Although physical separation and communication channels may be what the news media and organizations are focused on, the real driver [in virtual leadership] is the degree of psychological distance between leaders and followers. Followers who felt that their leader trusted them, backed them in difficult situations, and gave them autonomy, were both more successful and more satisfied." The full article is available online at this link.

Next week, I'll be chairing the Human Capital Institute's Employee Engagement Conference in Boston. It's not to late to sign up and attend. You can find out more about the program at this link. In the coming weeks I'll be working on an article for The Economic Times in India, a guest editorial I was invited to write for Talent Management magazine, speaking along with my colleague Jason Pankau to the leaders of a hospital system in Chicago and completing a book proposal for a book I'm coauthoring with Stephen Paletta, winner of Oprah Winfrey's Big Give television program and founder of The International Education Exchange.

At the technical Academy Awards ceremony in Hollywood, the Associated Press reported that it wasn’t the gorgeous host, actress Jessica Biel, who attracted the most attention.  Instead, it was an understated, bespectacled, computer engineer named Ed Catmull.  When Catmull’s name was announced to receive an Oscar for his lifetime of work in computer animation, the crowd went wild, whistling and whooping. And rightly so.  The impact of Catmull and his collaborators on Hollywood may last for decades to come. I’m not referring to his contributions in computer animation though.  More lasting will be his contribution to improve corporate cultures.   

Catmull, of course, is the president of Walt Disney and Pixar Animation Studios. He has rejected the Hollywood star system and replaced it with a community environment. Catmull described it this way in a Harvard Business Review article he wrote last year: “[Pixar has] an environment that nurtures trusting and respectful relationships and unleashes everyone’s creativity…the result is a vibrant community where talented people are loyal to one another and their collective work, everyone feels that they are part of something extraordinary, and their passion and accomplishments make the community a magnet for talented people…”(italics mine).

What is it about Pixar’s environment that attracts talented employees and helps them produce outstanding movies such as the blockbuster hits Toy Story, Finding Nemo, The Incredibles, Ratatouille, and WALL-E that have made Pixar the envy of Hollywood?

The element that Pixar’s environment that sets it apart is it’s intentional inclusiveness toward all employees. In most organizations only 20 percent of employees – managers and the stars -- feel included.  At Pixar the percentage of employees who feel included is certainly much, much higher than the norm. 

Inclusiveness begins with what management says about its employees. Catmull says that great movies are made from the tens of thousands of ideas that go into them from beginning to completion.  As such, everyone needs to contribute their ideas and opinions, everyone’s work matters and everyone makes a difference in the quality of a film. Pixar employees know senior management values their contributions whereas in most organizations the overwhelming majority of employees feel their contributions are not valued by senior management.  As a result, Pixar employees are more engaged in their work than employees of the average organization. And because they are more engaged Pixar employees put more effort in their work, they are more trusting and more cooperative, all factors that affect productivity, quality and innovation.

Another aspect of Pixar’s environment that contributes to inclusiveness is the Pixar University. It offers numerous courses related to filmmaking, the arts, health and other topics of interest to Pixar employees.  Employees can take up to four hours of classes each week.  In class participants develop acquaintances across the firm that strengthen their ties to the organization.

Pixar’s office design also contributes to developing loose ties across the organization. The cafeteria, meeting rooms, employee mail boxes and restrooms are centralized to make it more likely Pixar employees will interact with one another.

As a leader and advisor to leaders I have learned that practices, such as those above, are not sufficient to produce an environment that will help make an organization great.  It’s more than just what leaders do that matters.  Just as important is who leaders are.  Ed Catmull doesn’t just talk and act inclusive.  He deeply believes in it.  His business partner John Lassiter, Disney and Pixar Animation’s Chief Creative Officer, does too. They in turn select leaders who embrace these values such as director Brad Bird and his business partner, the producer John Walker (who worked together on “The Incredibles”). 

Late last year I met John Walker at Pixar’s headquarters in Emeryville, California. Listening to Walker it was clear to see that he embodies the values of inclusiveness. He has a the sort of bridge-building personality that helps people amicably resolve conflict and keep them feeling like a part of the community. During the course of our conversation, Walker told me how he insisted on gathering the entire team of more than 200 people who worked together on a movie at least once a week so that the extroverted artists and their more introverted technical counterparts came together as a community.  In the meetings, Brad Bird, Walker and others keep team members informed about the film’s progress get them thinking about how to solve the present set of issues facing the team. 

So long as Pixar’s leadership preserves its environment, I would expect it to continue leaving the rest of Hollywood in its wake.  In time, Catmull and Lassiter will return the magic to Disney Animation too.  

Sadly, research shows that approximately 75 percent of employees are not engaged in their jobs, which clearly indicates that the importance of the work environment is not on the radar screens of most leaders.  That’s tragic.  Work environments need to be healthy today, perhaps more than ever.  In the current economic downturn and shakeout that it will result, leaders will need the best environments in order to survive.  Pixar’s example has awakened Hollywood’s leaders from their slumber. It should be a wake up call to leaders in other industries too. 

What are you doing to make all of your organization’s employee feel like a valued member of your organizational community?   

Michael Lee Stallard is the president of E Pluribus Partners, a leadership training and coaching firm.  He is the primary author of Fired up or Burned Out.  For additional information, see www.MichaelLeeStallard.com.

In my experience as a leader, a board member and an advisor to leaders, I've learned that all great leaders are "servant leaders," a term first used by Robert Greenleaf in his influential essay "The Servant as Leader." Recently, I hosted several leadership and employee engagement webcasts that have a link to the servant leadership theme.

Howard Behar, the inspiring and wise former president of Starbucks International, spoke with me about his experiences as a leader and his outstanding book entitled It's Not About the Coffee. I loved this book. Howard is a fine example of a servant leader and, no surprise, he happens to be a member of the board of trustees of the Greenleaf Center for Servant Leadership, whose CEO, Dr. Kent Keith, was my guest in another webcast. Kent wrote an insightful book that I recommend entitled, The Case for Servant Leadership. He is an extraordinary thinker and I'm certain you'll enjoy his book and webcast presentation.

Another webcast I hosted was with Bill Shannon, the Chief Wisdom Officer of DaVita, Inc. DaVita is an remarkable organization that exhibits the values of servant leadership. It was recently named by Fortune magazine as #1 rated in the field of Health Care Medical Facilities for innovation, long-term investment and quality of products and services. Check out my webcast with Bill to learn why.

Finally, when leaders don't mature into servant leaders, they inevitably become what I call lonely leaders. Whereas servant leaders thrive from challenging work and a sense of satisfaction in healthy relationships, lonely leaders become relationally and emotionally isolated. Feelings of emptiness and boredom creep into their lives and, as a means to cope with these feelings, they seek the temporary thrills that come from excessive risk-taking in business, illicit sexual relationships and/or substance abuse. In a webcast with Robert Curry, founder and president of Turning Point for Leaders, we explore how corporate executives become trapped in substance abuse behavior and what is necessary to liberate them. Robert tells his own powerful story about becoming a substance abuser and the journey that led him to become a leader in the field of substance abuse treatment for executives. Getting to know this good man and his personal story has been especially inspiring to me because I felt I was once on the road to becoming a lonely leader, something I wrote about in an essay that Amazon published as an Amazon Short entitled "Alone No Longer." (You can read it for free here in a blog post I wrote about the surprising lessons I learned during my wife Katie's successful battles with cancer.)

When people feel emotionally connected, they put more effort in their work. Research bears this out. A 2004 Corporate Leadership Council study of 50,000 employees worldwide concluded that emotional factors were four times as important as rational factors when it came to employee effort.

Great leaders connect on an emotional level with the people they are responsible for leading.   When employees follow their leader’s example, they become more connected with one another, boosting trust, cooperation and esprit de corps throughout the organization. What I have discovered as a leader and as an advisor to leaders over the years is that the emotional connections leaders develop with people are ultimately grounded in the leader’s own values.  The values that foster connection among people come in clusters that I refer to as Truth Values, Beauty Values and Goodness Values.

Truth Values

Throughout A.G. Lafley’s stunning turnaround of Procter and Gamble, he listened to people rather than lecturing them.  After taking the helm in 2000, Lafley surveyed employees, held extensive meetings with them, and even met with P&G alumni to hear their views.  Lafley didn’t dominate the meetings but instead facilitated a conversation by encouraging people to share their opinions and ideas.   One of the reasons that P&G employee morale recovered and its performance improved was that employees felt connected to Lafley when he gave them a voice and implemented many of their ideas. When other leaders emulated Lafley’s approach, P&G employees became a more engaged and, as a result, they put more effort in their work. Furthermore, the increase in conversations and interaction created an internal marketplace of ideas that helped decision makers make better-informed decisions and fueled innovation.   

When you deconstruct Lafley’s behavior - seeking input, listening to ideas and opinions, considering them and acting on those that seem to be right — it reflects a number of Truth Values that include humility, curiosity, open-mindedness, wisdom and love of learning.  These values in a culture help identify truth by bringing out into the open the knowledge of many (i.e. diverse individuals who have differing perspectives, thinking styles, experiences and observations) so that truth can be identified and acted upon.

In contrast to A.G. Lafley is the example of Howell Raines, the former executive editor of The New York Times.   As the investigation unfolded into plagiarism and fabrication by Jayson Blair, one of Raines’ young star reporters, numerous press accounts described Raines as a leader who was arrogant and hostile toward those who disagreed with him. These charges reflect a lack of the values that made Lafley so successful.  Raines’ leadership style prevented connection in the work environment.  As a result, Raines was fired, his tenure having lasted less than two years, the second shortest of an executive editor in the Times’ 152-year history.

Beauty Values

Steve Jobs, CEO of Apple, is passionate about changing the world with Apple products that reflect aesthetic beauty in product design and excellence in product functionality. An appreciation for aesthetic beauty as well as excellence in execution, hope, optimism, vitality and enthusiasm are a few of the Beauty Values. As a leader, Jobs is weak on the next set of values and that works against him but he is able to make that connection with Apple employees who share his drive for beauty and excellence.   

Goodness Values 

David Neeleman, the founder and former chairman and CEO of Jet Blue airlines, is a leader who incorporates Goodness Values into his leadership style. The values in this cluster include love of people, respect, honesty, integrity, fairness, kindness, and forgiveness. Neeleman reflected many of these values when he began and led the airline.  He routinely met with new Jet Blue employees and remembered many employees’ names.  He traveled on Jet Blue flights one day each week and worked alongside Jet Blue crew.  By doing this, Neeleman showed that he valued everyone’s role and that no position was beneath him.  Two years after Jet Blue opened for business, it needed to fill 2,000 new positions.  An astounding 130,000 people applied.

Many non-profit organizations and health care organizations benefit from the Goodness Values.  Their passionate, dedicated employees are drawn to these organizations because the Goodness Values are reflected in their day-to-day work and interaction with people. Organizations that promote social responsibility and environmental sustainability reflect the Goodness Values too because these aims are based on integrity and respect for others. 

Putting It All Together

Truth, beauty and goodness move people’s hearts and minds.  Moral philosophers and religious leaders throughout history have advocated the values that underlie truth, beauty and goodness.  Most psychologists today believe the values promote human flourishing. 

If you aspire to be a great leader, it would be wise to know the Truth, Beauty and Goodness Values and to cultivate them in your own character and in the character and culture of your organization. We are all wired differently.  Some of these values may be come natural to you while others will take intentional effort to develop.  A mentor or coach can be of help here.

Here are some practical suggestions that will help you connect and encourage connection in your culture:

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• Put your values in writing for everyone to see and include why they are important.
• Meet with employees and share why you believe in the values. Using personal stories to illustrate your values will help people remember them.
• Look for ways to continuously celebrate employees who model the values and be sure to get their stories out as well.
• Incorporate the values into performance appraisals and the promotions process.
• Read about great leaders throughout history and you will see examples of how their values connected them with the people they led.
• Make yourself accountable to a few people who will commit to telling you if you do anything that even appears to be inconsistent with your values.

As you establish Truth, Beauty and Goodness Values in your organization’s character and culture, people will learn that there is a right way to do business, one that reflects the values, and a wrong way.  Plenty of organizations in the press today have learned from experience that compromising these values ultimately harms organizations and their employees. Doing business the right way is the only path to sustainable superior performance.

Michael Lee Stallard is the president of E Pluribus Partners, a leadership training and coaching organizations.