As originally published by Financial Advisor magazine.
Financial advisors are exceptionally talented at reaching out to clients and asking them how they feel. Unfortunately, we often forget to do the same with our teams.
Our firm recently did a quick survey of advisory firms and found that virtually every single firm had reached out to its clients with multiple letters and phone calls during the pandemic. But almost no CEO penned a letter to employees.
Yet that is exactly what we should be doing, because how our colleagues feel and how much they care may be the decisive factor in how this situation ends—for both our firms and clients.
In the words of Southwest Airlines founder Herb Kelleher, “There is only one way to profitability and stability in times of both boom and bust—employee morale.”
As I write this, my colleagues and I have all scattered to our home offices, handling Zoom calls while fighting off crying children, barking dogs and crashing applications. We are all tired of the long hours, the difficult questions we can’t answer and the confusion about the future. We are all demoralized by isolation and the stream of bad news. Yet we all have to find the reason to keep doing what we do and perhaps do it even better.
Like most things in management, morale has many definitions, but the one that resonates with me the most is from a book called simply Employee Morale by Cary Cooper and David Bowles. It says, “Morale is the spirit of a team that makes its members want the team to succeed.”
When we face a crisis, we all need to make sacrifices. They come in the form of additional effort, of rewards and compensation forgone, of comfort abandoned and plans rewritten or forfeited. The willingness to make sacrifices is directly proportionate to our desire to see the team succeed. We have all had teams in our past that we would have done anything for. We’ve also been part of teams whose demise we may have actually contributed to or celebrated in secret. The difference was in how much we cared about the teams’ success.
Many factors influence morale, but they can be organized into four categories:
- Leadership: who leads the team and how;
- Motivation: what drives the behavior of team members;
- Team Dynamics: how we relate to one another and how much we care for one another;
- Context: the environment and factors we operate in (such as the current health crisis).
Each ingredient plays a key role in the outcome—the team’s desire to succeed.
Frederick Herzberg, a very influential psychologist, proposed his motivator-hygiene theory in the 1980s, stating that factors such as compensation, a safe environment and reasonable work policies are the foundations of employee satisfaction. Without those “hygiene” factors being addressed, any attempt at motivating employees through stories of growth and achievement will be resisted. The same is true for morale—if you have not met the basic needs of your team, inspiring it may be nearly impossible.
Therefore, before attempting any grand speeches (and I love those) a leader should remember that most of all, a team wants to hear that they are safe and secure.
In the year 468, the crumbling Roman Empire (broken into the eastern and western halves) attempted to regain control of the Mediterranean and conquer the Vandals (the tribe whose pillaging of Roman cities gave rise to the term we still use). The expedition had over 1,000 ships and 50,000 soldiers. Unfortunately, the show of military might resulted in a great disaster when the Roman commander and later emperor Basiliscus fled in the middle of the battle, abandoning half of his troops and marking the last time the Western empire raised a great army.
About 70 years later, a general called Belisarius from the Byzantine Empire (the surviving eastern half of the Roman Empire) landed on the same shore with 15,000 men facing over 100,000 Vandals. Belisarius, possibly one of the most brilliant and lesser known generals in history, led his troops to a decisive victory, when this time the Vandals fled upon the first clash with the veteran Byzantine soldiers. Morale makes all the difference, and morale starts with having the right leadership.
It’s often an abstract concept, but we can turn the ideas about leadership into actions. Specifically, we must:
- Communicate—in other words, confront and answer difficult questions;
- Be honest and speak and act with integrity;
- Be confident and positive, since a team that does not believe in its own success is rarely successful;
- Adapt, since a crisis will require flexibility of approach and means;
- Focus on what matters the most, since a crisis often entails trade-offs that are very difficult. It is the job of leaders to determine what is most important;
- Listen and make sure that no one feels forgotten;
- Remove the bad apples (more on this later).
Leadership sets the tone for influencing both individuals and the team’s motivation.
Individual motivation and team morale can be quite different. In fact, it is very possible that a highly motivated professional acting in his or her own self-interest will damage rather than help team morale. The enthusiasm of a team is not always a sum of the parts.
The organizational psychologist David Sirota says employee enthusiasm is a function of three factors:
- Fairness. A sense of fairness is deeply ingrained in our psyche and is key to our willingness to contribute to a team. In teams where members perceive themselves and others to be treated fairly, they are much more willing to commit to common goals and forgo personal ones. The opposite is true, too: If team members see themselves or others treated unfairly, they are very likely to withhold effort and perhaps even sabotage the team’s goal.
When it comes to compensation specifically, those rifts can widen in times of crisis. If people were already seeing rewards being unfairly distributed, their feelings will not get any better when bonuses disappear—specifically, if team leaders did not cut their own salaries proportionately with their income. The result will be very poor morale.
- Achievement. A good organization will find a way to balance individuals’ personal need for feelings of achievement with the accomplishments of the group. If people with high doses of talent and ambition don’t feel a personal sense of accomplishment, they might struggle to subscribe to the team goals. The opposite is true, too, because if we only recognize certain individuals, the team overall will likely experience horrible morale.
A crisis will require leaders to redefine “achievement.” We might have rewarded business development before, for example, but now client retention has emerged as the new priority.
- Camaraderie. This is about the way team members relate and the sense of belonging they get from the group. It is a combination of the happy hours and watercooler discussions and the interest we take in one other’s personal and professional lives.
It may seem to come from some unpredictable human chemistry, but in fact camaraderie can be created and fostered very purposefully when we encourage people to take an active interest in one another. We all want to be accepted as part of a group. When we are accepted or rejected we experience very powerful emotions. One of the simplest things we can do and one of the most effective (and overlooked) is to make sure our team embraces all its new members.
Sometimes preserving camaraderie may mean keeping the team together, even if it is difficult. Other times it may mean removing those members destroying team morale.
An influential paper entitled “Bad is Stronger Than Good,” co-authored by a team of psychologists and social scientists, says we retain and are influenced by negative experiences a lot more than positive ones. The paper points to research suggesting that it takes five positive experiences in any relationship to erase the effects of a single negative one.
One of the paper’s co-authors, Roy F. Baumeister, says in his book The Power of Bad that one of the most important determinants of team morale is the absence of “bad apples,” people who create an environment that strongly discourages any team contribution and kills morale. Removing these people is one of the most important functions of leadership.
Another researcher, Will Felps, catalogued three prominent types of these bad apples, with descriptions that seem to come from the game Dungeons & Dragons:
- “The withholder of effort” is a mighty warrior who refuses to lift his battle axe. He makes everyone else on the team do his work and makes them feel they are being taken advantage of.
- “The affectively negative” is a wizard of doom and gloom whose constant negativity sucks the energy out of any team.
- “The interpersonal deviant” is the troll who in subtle or not-so-subtle ways tends to break all the social rules. This includes the rude person who does not follow norms, the bully who takes delight it intimidating, the gossip and the chronic underminer.
These creatures are shockingly more common than you may think and the biggest culprits in destroying morale. Unfortunately, they are also sometimes the leaders who were supposed to fix everything. Which brings us back to the crisis.
Traumatic situations like the pandemic trigger our fight-or-flight response. The good news is that we have another instinct: People who experience crisis together tend to form stronger relationships and bonds. In experiments, participants under stress are much more likely to collaborate in an economic game than those who aren’t.
Unfortunately, it is also true that chronic stress wears us out and makes us more aggressive and less collaborative. This means that the longer the crisis lasts, the more we will need all the tools at our disposal to maintain morale.
So hopefully, by the time you read this, you have just come back from happy hour in your favorite bar or restaurant and spent time with your colleagues. If you didn’t, chances are that virtual happy hours are getting old. If that’s the case, remember that even if we can’t drink together, we can still succeed together. And we will.