1 EMPLOYEE ENGAGEMENT IN RUSSIA, A PREVIEW VERSION HOW TO BUILD A CORPORATE CULTURE OF ENGAGEMENT, CUSTOMER FOCUS AND INNOVATION Jon Hellevig Publisher: Russia Advisory Group Oy, Helsinki 2 Preview e-book published September 2012 Publisher: Russia Advisory Group Oy, Helsinki [email protected] Copyright: Jon Hellevig Cover by Alexandrа Mozilova on motive of painting by Henri Matisse ISBN 978-952-99785-9-5 3 ABOUT THE AUTHOR Managing Partner, Awara Group Jon Hellevig mounted his career in Russia at the inception of the nation's market reforms in the early 1990's. Hellevig gained experience with running organizations in Russia at an American-Russian joint venture SFAT, where he worked as a CFO and lawyer, and subsequently taking on the same duties for Armstrong World Industries (Central and East Europe). Hellevig is the founder and managing partner of Awara Group and the group's recruitment and executive search company, Awara Direct Search. He is also a member of the Board of AEB (Association of European Businesses), the most influential business association for foreign companies in Russia. As Awara's Managing Partner, and in view of his solid experience with Russian business and Russian culture, Hellevig has acquired hands-on experience with Russian Human Resource Management. He is involved in organizational consulting and executive search with Awara Direct Search. Hellevig has also conducted extensive research on Human Resources Management theory, Corporate Culture, and social practices in Russia, and consequently written numerous articles and books on the topics. As an inquisitive lawyer Hellevig developed an interest in the philosophy of law with the aim to answer the question: What is law? This was the inspiration behind his works, Expressions and Interpretations and All is Art. These books deal with the philosophy of law, social practices, and democratic competition. These interests further led him to deepen the studies of social practices, the fundamentals of human knowledge, and human behavior. Hellevig postulates that knowledge (or what is called so) is founded in social practices and in turn represents the individual interpretation of feelings in the context of social practices. The latter ideas form the premises for Hellevig's linguistic theories as expressed in The Case Against Chomsky. Hellevig has earlier written Avenir Guide to Russian Taxes (2002, 2003, 2006 English and Russian editions); Avenir Guide to Labor Laws (2002, 2003, 2006 English and Russian editions); Expressions and Interpretations, a book on the philosophy of law and the development of Russian legal practices; All is Art. On Social Practices and On Democratic Competition (2007 English, 2009 Russian Vse Tvorchestvo); The Case Against Chomsky - A Biological Philosophy Volume 1 (2010); and Mental Processing – A Biological Philosophy Volume 2 (2010). Hellevig is active in public discussions of current affairs and social structure contributing with articles and commentary in the media. He regularly lectures at international seminars on topics within his specializations. Before entering the Russian market, Hellevig gained experience at the Central Bank of Finland; the successor bank of present day Nordea; and the private bank which is now 4 called Mandatum – having been a co-founder of the latter. Jon Hellevig has a University degree in Law from the University of Helsinki, Finland (1985). In 1998 he acquired an MBA with the Ecole Nationale des Ponts et des Chaussees and University of Bristol Graduate School of International Business with KPMG European Training Center, 1998. Jon Hellevig is multi-lingual with respect to the following 4 languages: English, Russian, Swedish (native) and Finnish (native); and also has knowledge of Spanish, French and German. 5 FOREWORD TO PREVIEW VERSION OF EMPLOYMENT ENGAGEMENT IN RUSSIA This book on employee engagement in Russia builds on my experience of managing Russian organizations since 1990s and my studies of human behavior and social practices as expressed in my books: Expressions and Interpretations, All is Art, and the two books in the series of A Biological Philosophy: The Case Against Noam Chomsky and Mental Processing. I consider it a fully finalized book. Nevertheless, with the view to develop a further version of the book which will take into account the experience of the larger public, we have chosen to call it a preview version. For this purpose we have decided to publish this preview version as a free e-book to solicit the opinions of any reader. We will also actively distribute it to specialists who might be interested in the topic. As a special effort we will contact a host of CEOs and HRDs working for major foreign and locally owned firms in Russia. – Yes, we are engaging the public in this effort. ACKNOWLEDGEMENTS I would like to thank our wonderful team at Awara Group who has served as an inspiration for writing this book, and enabled me to devote most of my time on this project while they have taken care of the business. Special thanks to Scott Spires who has edited the language. 6 CONTENTS CHAPTER 1 – EMPLOYEE ENGAGEMENT IS A KEY DRIVER OF MODERNIZATION AND INNOVATION ......................................................................................................10 Employee Engagement, customer focus, and innovation ................................................................. 2 The energetic, enthusiastic and flexible Russian worker ................................................................. 7 Employment engagement in Russia offers huge opportunities ...................................................12 How Russia engaged me .............................................................................................................................15 CHAPTER 2 – WHAT EMPLOYEE ENGAGEMENT IS AND WHY IT MATTERS .......................................................................................................................................23 Employee engagement – what it is and why it matters .................................................................24 Engagement vs. Job Satisfaction ..............................................................................................................27 Engagement vs. Commitment....................................................................................................................29 Engagement vs. Empowerment ................................................................................................................31 Engagement vs. Motivation ........................................................................................................................32 Engagement is essential for business success ....................................................................................33 What an engaged employee is like..........................................................................................................35 What corporate culture is and the drivers of engagement ............................................................38 Engagement Drivers – What influences a corporate culture ........................................................40 CHAPTER 3 – WHAT CORPORATE CULTURE IS NOT ...............................................................................43 What corporate culture is not ....................................................................................................................44 The Perils of Corporate Anthropology....................................................................................................50 Ghosts, Tough Guys, and other Misleading Concepts ......................................................................53 Good cultures and bad cultures ................................................................................................................58 CHAPTER 4 – HOW TO BUILD A HEALTHY CORPORATE CULTURE AND THE DRIVERS OF ENGAGEMENT ........................................................................................63 Trust, fairness, respect ..................................................................................................................................64 Alignment ..........................................................................................................................................................65 Communication ...............................................................................................................................................66 Empowerment ..................................................................................................................................................69 Efficient processes .........................................................................................................................................70 Organizational structure ..............................................................................................................................72 Self-discipline ..................................................................................................................................................77 Total focus on customer satisfaction and quality ..............................................................................78 Behaviors required from leaders and managers ................................................................................79 Individual drivers – quality of life ...........................................................................................................83