This week, Andy & Brian talk about why frontline employees and executives have such different views on the state of their businesses:

– What’s the “purpose gap” and is there a way to reduce it?

– How can companies ensure they’re allowing their staff to make forward progress on their projects?

– Is having differing views on the customer the biggest disconnect between executives and rank-and-file staff?

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Brian Beck: Welcome to the Friday 15 with Master B2B, my name is Brian Beck here with Andy Hoar my partner in this thought leadership series. Andy, welcome to a steaming hot July Friday 15. What a week it’s been everyone’s getting baked all over the country. My air conditioning went out…for those of you who can’t see me I’m in a different location today.

Andy Hoar: Is that an RV that you’re in there?

Brian: Yeah, I’m in an RV. That’s right. It’s a delivery van. Yes, I’m in the Amazon delivery van. An RV or a delivery van. Oh, my goodness. Well, welcome, everyone, to Friday 15. We’ve got some interesting, interesting stuff that continues to hit the wire, Andy. Going to our breaking news this week. These stories, Andy, coming out from big distributors in the industrial sector. “Motion’s Q2 declines reflect ongoing industrial softness.” That’s a story out of MDM. Another story from MDM. Modern Distribution Management. “In Q2 Fastenal had its weakest daily sales growth in three years”. What’s going on, Andy? We got softness happening here. We’ve talked about this before. It’s continuing, it seems.

Andy: Well, I think you’re going to do your best to drive the B2B space there in LA by ordering your air conditioner replacement. So that’ll definitely get the orders churning at Fastenal and other places like Granger. I think what we’re seeing is the economy, the jig is up. I think we’ve had this extended, prolonged bull market, essentially, and the economy is so efficient now with technology that it’s able to sort of rationalize the problems and make up for deficiencies and private equity firms can come in and cut the fat. But I think the efficiency argument, I think we’ve cut everything we can from the bone at this point. And because interest rates were high for a while, it slowed the economy down. I think long story short, we’re seeing the effects on the consumer market. And now we’re seeing the real effects in the B2B market. And this is where you know it’s real because when these guys start cutting back on orders and such, they’ve seen a trend.

Brian: We’ve got a longer cycle here, and it’s sort of core to the economy, it seems. Now, we’re not economists, we’re just observers, right? But we see this firsthand because of all the manufacturers and distributors we talk with across lots of different industries. So it’s going to be interesting and we’ll continue to watch this and observe. These companies are fine financially but they are indicating some things that are leading where we’re going here. So today we’re going to talk about – What is the biggest disconnect between the rank-and-file employees and executives. This is a fascinating topic. And we’ve been covering some this summer. We’ve been covering some more of these sort of organizational topics that are fascinating and top of mind for a lot of the executives we work with and talk to every day. And really, this comes down to a couple of different things. We did a LinkedIn poll here. We’ll show it later in our Friday 15. But, Forrester did this research last year and they looked at Gen Z and looked at other generations. The quote, here’s a quote from their research. “Gen Z employees are not just looking for a job. They are looking to become part of a community and build something.” So when we think about this disconnect, this has something to do with it, right? There’s a couple of different elements here. Andy, we can talk about incentives and other things and pay. The problem is, and McKinsey did this study. This was a really fascinating paper you found. Thank you. There is a purpose gap. What is a purpose gap? Well, essentially, living your purpose in your day-to-day work. What percentage of executives versus rank-and-file feel like they’re living their purpose? Well, big, giant gap here. 85% of executives in upper management agree they can live their purpose in their day-to-day work The exact opposite with rank-and-file, 85% of frontline managers and employees are unsure or disagree they can live their purpose in their day-to-day work. Well, there’s a gap for you. Gosh, what do you think of this, Andy?

Andy: Well, it helps when you’re making the decisions, when you’re allocating the assets, when you’re in charge, right? And I think when you’re in charge… You feel more powerful, more control over your circumstances. At a lot of these companies, as we know, the senior executives make the decisions in the rank-and-file have to live with it. Well, there’s a natural problem there, which is I don’t feel like I’m a part of the decision making dynamic. I have a hard time accepting that I have any control over my circumstances. So it isn’t surprising. That’s a pretty big gap, but if you’d asked me, I wouldn’t have thought it was 85, 15 and the exact opposite. But it does make an important point that I think if you can see on the screen here, that 50% of rank-and-file employees disagree or strongly disagree that they’re fulfilling their purpose. So there’s a motivational problem here that needs to be overcome, which we’re going to talk about in a moment.

Brian: What’s interesting to me, too, Andy, is that you think about your point about control, sort of control of your destiny. And when you get to those upper levels, you can make decisions which result in something.. So you think about this double edged sword here where it’s almost self-fulfilling. You get to the point where you can make decisions and you find purpose in those decisions and see the results of those decisions. At the same time, you’ve got the younger rank-and-file Gen Z saying, hey, purpose is really important to me. I’ll bet that same number amongst boomers or Gen X is not nearly what it is amongst Gen Z. This is coming from both angles from a cultural perspective particularly here in the U.S. right so but well we live in a different world today too.

Andy: Let’s be honest where you know we’re not struggling to survive like we did back in the day…like if you watch movies that are period pieces from the 30s or whatever people show up to work at a construction site and if they get picked they’re thrilled. Today, people wouldn’t even show up. I remember when I read about when they were building the Golden Gate Bridge, there were people falling all the time. And sadly, people died. All that meant was that there were hundreds of people who showed up ready to take their job. They would almost cheer for somebody to fall and die because that meant a job opening for them. We don’t live in that world anymore. And so because we don’t, and we have more like luxury interests in this world, then people are thinking, well, if I’m going to work, it should be worth my time. Whereas generations ago, it was, if I’m going to work, I need to eat. Big difference.

Brian: We’re well past the Great Depression, right? That’s what formed a lot of those baby boomers and their mindset towards this stuff. But here’s the other thing, Andy. So you’ve got this Gen Z generation, which really wants purpose. And then you’ve got this other statistic here, which is fascinating because it shows executives, they need to motivate these folks and give them purpose. But then they overestimate their effectiveness as motivators, as leaders. This is what we’re showing here for those who can see it. is something called the Organizational Health Index, which is basically a gap analysis done by McKinsey, which talks about how inspiring leaders are in the organization. From a leadership perspective, leaders overestimate their ability to inspire dramatically. And from a motivation standpoint, same result. So we see another gap here, Andy, related to how effective these folks are. So even if there is a purpose to be had, leaders aren’t communicating it effectively, apparently. What are your thoughts?

Andy: I think this was what gave rise years ago to this idea of 360-degree feedback. Remember that? It used to be like we’d sit down for a review and the boss would tell you what he thought or what she thought. You’re doing this well you’re doing that well. Now, get out of here and do better. And that was missing this feedback loop, which, by the way, you wouldn’t do that with customers. Hey, here’s what we’re selling. Get out of here. You know, you want to find out what the customers think about it. And this pervaded the workspace too, where people said, wait a minute, maybe we should hear from people how effective our policies are. In this study, what they did is they asked the leadership the same question as the rank-and-file. They asked the leadership, how effective do you think leaders in this company are? And of course, they’re talking about themselves. We’re pretty effective. Oh, great. We’re great. From the people I talked to, it seems to be just fine. But then they’d ask the same question of the rank-and-file and they get a different answer because sometimes it’s not what you encode, it’s what people decode, and they were decoding things very differently.

Brian: Only 61% of the rank-and-file said the leaders inspire action by others. So how do you address this? How do you close the gap and motivate people and get them to share the vision? How do you get Gen Z on board here? This is an interesting question.

Andy: A ton has been written about this. And by the way, this goes well back 100 years about what motivation is. And it’s fun to take an exploration of that because you see stuff that talks about us as hunter-gatherers and things of that sort. But this was the one that I think set things apart. I remember reading about this a couple of years ago, and it always stuck with me. And it’s a book called The Progress Principle by Theresa Amabile and Stephen Kramer, who are one of the professors at Harvard Business School, organizational psychology PhD’s. And what they did was they took a very different approach to this. They said, we’re going to analyze diary entries. So they gave 238 employees in seven completely different companies diaries. And they said, we want you to record what happened for you on a daily basis. They ended up analyzing 12,000 diary entries, which amounted to 64,000 discrete events. And what they concluded from that was that ultimately what motivated people the most and what made them the happiest was making “daily forward progress on meaningful work.” And it didn’t have to be big stuff. It could be small stuff. I think they had a couple of examples in the book. I’m just going to read a few here. One is – the guy is a programmer said, “I smashed that bug. That’s been frustrating me for almost a week now. That may not be an event to you, but I live a very drab life. So I’m all very hyped.” Somebody else wrote, “I figured out why something was not working correctly. I felt relieved and happy because that was a minor milestone for me.” And then the last one was somebody said, “we spent a lot of time updating the cost reduction project list. And after tallying all the numbers, we were still coming up short of our goal. It’s so discouraging not to be able to hit that number after all this time and hard work.” And so, you know, we forget sometimes that people are living in the trenches. They’re tasked with projects. And that’s the reality they live in. And if they can actually chip away at those projects and at the end of the day feel like they’ve made progress, that makes a huge difference. There’s this sense that everybody, every manager is like a football coach where they have to give an inspirational speech in the locker room about “go get ‘em” and stuff like that. And I think what we’ve discovered is that maybe that is like a sugar high. It gets you pumped up for a couple of minutes, and then five minutes later, you go back to reality, which is you’ve got to solve problems. So it feels like this is, in fact, what motivates people. And the interesting dimension here, just quickly, is that the negative side of this is doubly powerful and in a negative way, in that when people feel like they can’t make forward progress, you can give them all the titles in the world. You can pay them well. They can even enjoy working with other people. But if they show up every day for work and they’re frustrated around every corner, then eventually you’re going to lose them because that’s what they have to do. And so being in a frustrating circumstance where they can’t make forward progress despite all the other extrinsic factors, it makes no difference. But you said, we were talking earlier, you said you had an example of this just today.

Brian: It was fascinating because the manager, their job is to enable people to be able to do these things and achieve meaningful work. But it’s not even just within the structure of their particular function within a corporation. I was talking earlier today, actually, Andy, to an upper level manager at a large plumbing company, a big plumbing manufacturer. And what she told me was there were certain things she’s trying to do in e-commerce. that she wasn’t able to do because she’s fighting against other parts of her organization. So the sales team in particular, in this case, they’ve got someone out there managing small retail sales. These folks are coming online and selling products and really causing channel conflict with what she’s trying to do in e-commerce and she can’t get it done. So it’s not even just within the function. We’re talking about getting things done cross-functionally. So the manager’s job isn’t just that, the executive’s job. You’ve got to be mindful of how your organization is functioning, even within things like channel strategy. Meaningful work can mean a lot of things, but that’s a very subjective term.

Andy: The upshot of this as a manager or a leader’s job is to clear the frustration paths out of the way. Enable your employees to not be frustrated on every turn by bureaucracy or bad decision making or indecisiveness. These are all the things that your job is to clear the path as a manager. And that’s hopefully what good managers are doing. The meaningful work thing, just as a final point here, there’s a famous story about a janitor at NASA who was asked many years ago, what do you do at NASA? And he said, “I put astronauts on the moon.” Now, the reality is he was cleaning toilets. But he felt he was a part of a larger organization. He was doing something he considered to be meaningful work. You can’t snow people here, but you can say, look, if you’re changing tires on a car, you’re actually enabling this family to drive safely from point A to point B. And you’re saving lives by doing this. So you’re not just out there putting bolts into something. So this is another role for the manager – to define what meaningful work is.

Brian: So we asked the question, Andy, of our LinkedIn audience – “What is the biggest disconnect between employees and executives?” And it was fascinating. We provided several different options. It was really interesting what came out. We asked a variety of different things, and the number one was actually “a different view of the customer,” that was 50%, followed by “alignment on vision” at 36%, which is really what we’ve been talking about a lot here. “Communication style” and “incentive structures” were very low, only 7% on each of those two areas. So really, this surprised me, Andy, different view on the customer. What do you think is driving that?

Andy: I think the thing about the different view of the customer is – I think executives are telling themselves and maybe they’re recognizing maybe they don’t – that they can tend to get an oversimplified or sanitized view of the customer. And I think they know that. I’ve talked to many executives who when they go out and talk to customers, they always say things like, “well, all the customers I talked to seem very happy.” And, “these guys love our brand.” But the people in the trenches who are dealing with customers on a day-to-day basis have a more complex and nuanced view where, yeah, maybe they appreciate the brand, but they’re also not happy about the fact that the shipment consistently arrives a day late. And so that disconnect is because they’re not on the operational side. And sometimes that information doesn’t make its way up the chain. I think some executives recognize that maybe I’m not seeing the full picture of the customer, which is I think the reason for this. That said, I think we both know that might be an excuse and that the real disconnect is the one we spent the first 15 minutes talking about, which is the lack of alignment on vision and this inflated view of their ability to motivate people and that people understand what’s in their head. “I think this is our vision. Therefore, everybody in the organization does.” Not always.

Brian: The rank-and-file are saying, “well, our executives have this crazy view of who the customer is… yet I’ve got all these challenges and I’m actually talking to the customers. I see what’s going on here and the executives don’t understand how to better serve the customer.” I think they’re really related. And even as it relates to my example earlier about overall seeing the challenges that lack of alignment can provide and how that translates to ultimately how the product and experience shows up for the customer in the market. So, I think these are interrelated. I was a little surprised that alignment didn’t win though

Andy: This reminded me of the famous stories we’ve often heard where you ask a CEO what the vision for the company is and they can explain it in two sentences or less. This is our value proposition and they’ve got it all figured out about how we’re different, et cetera. Then you go talk to somebody in the rank-and-file and they say, “what is the vision of the company” or “what’s our value proposition?” And they’re like,” I don’t know. I just changed the tires or whatever.” They don’t know. And the problem there is it’s not the rank-and-file’s fault. That’s the fault of the senior management because they have to be out there evangelizing and reinforcing what it is they’re doing in this company because it goes to the meaningful thing. If people don’t know what they’re doing or why they’re doing it, they’re not going to be very good at it.