Key qualities that can turn a company into a great place to work
Robert Levering, the co-founder of the Great Place to Work Institute and a pioneer in the field of employee engagement surveys, talked to Roche about some of the key qualities that can turn a company into a great workplace.
Roche: You started your career as a business journalist, and, in 1991, you co-founded a company, the Great Place to Work Institute. Can you explain this unconventional career path?
Robert Levering: Certainly. As a labor reporter, I used to focus largely on bad workplaces. I wrote many articles on dissaffected workers, on strikes, on employees who had filed lawsuits against their employers. As a journalist you are always trying to find out what’s wrong with the world. After I had written my first book together with Milton Moskowitz in 1981, an editor in New York who had read it approached us, and asked us if we would be interested in doing a book with the title The 100 Best Companies to Work for in America. I thought she was making a joke, and I asked her: “Why don’t we do a book on the 100 worst companies to work for in America?”, and she laughed: “We don’t have enough lawyers for that.” In the end, we accepted her offer, and we started our journey across the United States, going to 130 companies and doing interviews with employees. The important insight we gained from this was that there actually were some great workplaces. This caused a huge change in my thinking, a real transformation in my mind, since I had not been aware that such places existed. And many other people didn’t know either. So when Milton and I discovered all those fine workplaces, we thought: Wow, this is really a good story. Word of this has to get out.
But what motivated you to establish a company, the Great Place to Work Institute?
Our book was published in 1984, and it was a big success. So I wrote another book, A Great Place to Work: What Makes Some Employers So Good—and Most So Bad. A man who read this book and who had great experience with employee surveys contacted me and asked me whether I would be interested in doing an employee survey based on the concepts of my book. I said yes, and so we created a survey along with Amy Lyman who was a college professor with expertise in organizational development. Originally, I wanted to do both, reporting and surveys, but the surveys became more and more involving. Plus I wanted a more active role. I started feeling frustrated by just reporting about these places instead of doing something to help companies become better workplaces. This is how Amy and I ultimately were motivated to set up this institute.
Is there some special, decisive “quality” that makes a company a great workplace?
What all great workplaces have in common is a high level of trust between management and employees. The really bad workplaces always seem to lack this. Trust is the real key, the basis of everything. I once coined a phrase which I think summarizes it in a nutshell: “A great place to work is a place where you trust the people you work for, have pride in what you do, and enjoy the people you work with.” Employees also want to feel that they are part of a company that is distinctive and unique. Without this special quality it is very unlikely they will consider their company a great workplace. In multinational corporations, it is also extremely important to effectively communicate the common values of the company while at the same time giving local management the necessary autonomy.
Are small or big companies more likely to be good workplaces?
Every year we survey more than 7500 companies throughout the world using our “Great Place to Work Trust Index.” We have found a slight statistical likelihood that smaller companies tend to have a higher score on the trust index than larger ones. But there are very many exceptions, so you can’t predict anything based on size. Nor can you make predictions based on the industry your company is active in, nor on its location or the profit your company makes. These are not relevant variables. What is key is how management operates, how it communicates with the employees, how it implements processes and policies. There are examples of great workplaces in any industry. The one thing I’ve learned in all these years: Every company has its own unique culture and its own unique challenges. There is no magic formula. A high level of trust, however, is always very important.
Can you identify a common misconception by management about how to create a great workplace?
The most common misconception I have observed is that they believe a change in policy can make a big difference. But it can’t. What they should much rather think about is how to improve the level of trust.
Does a great workplace also translate into a better bottomline?
We’ve done many studies on that, and the short answer is: yes. Companies with great workplaces have outperformed their peers in terms of stock performance for many consecutive years, and they have two to three times better returns. The turnover rate of employees is also much lower, which saves money because recruiting and training a new person is very costly. Also in an environment of trust people are better able and also more willing to contribute their best ideas. This is especially important for an innovation-driven company like yours, where you constantly have to come up with new products, new ideas, new ways of doing things. Also, the higher the level of trust, the more likely people are going to cooperate with each other. And the better the employees feel treated and appreciated for their good work, the better they are also going to treat their customers. So a great workplace is invariably embedded in a business-related context, if you will.
Have you seen any changes for the better or worse in the past 30 years?
Definitely for the better. First, there is a lot more focus on this area than 30 years ago, it has become mainstream. Second, there is much more awareness that you can do something about it, that you can actually and consciously make the workplace better. And I don’t think I’m being too immodest when I say that the global work our institute has carried out over these last 20 years may actually have contributed to this development quite a bit. The biggest change, however, is that today, people in top management consider this to be a significant issue which merits their full attention. This was not the case at all 30 years ago.
Do you still have a vision or a dream you’d like to see come true?
Yes, my dream is that in the not too distant future, the topic of great workplaces will be viewed and treated in a similar fashion as the whole quality movement years ago. What I mean is this: In the 1970s, quality was seen as more or less optional, whereas today it is considered as absolutely key to success. And there is a clearly defined path on how to achieve excellence in this domain, be it an ISO norm rating or a Six Sigma rating. My dream is that this will also apply to the great workplace philosophy and practice, and that everybody will understand that a great workplace is not an accident but something that every manager can and must very consciously aspire and contribute to.
In 1984, the business reporters Robert Levering and Milton Moskowitz published their book, The 100 Best Companies to Work for in America. This pioneering publication soon became a best seller. Four years later, Robert Levering published A Great Place to Work: What Makes Some Employers So Good—And Most So Bad. Robert has been fascinated with the study of great workplaces and with the strategies aimed at improving workplace productivity ever since. In 1991, he founded the Great Place to Work Institute (with Amy Lyman) which today operates in nearly 50 countries. Today, Robert is Chairman of the Board of the GPTW Institute. He is also well-known as the co-author of Fortune magazine’s annual list of the “100 Best Companies to Work for”. He has been featured in leading national and international publications as well as on many popular TV and radio shows. He lives in San Francisco, California.