1. MANAGING EMPLOYEE ENGAGEMENT DURING MAJOR ORGANIZATIONAL CHANGE Monthly Webinar Series September 24, 2015

2. 2 Topic Agenda ItemTime (min) Introduction/Why the Topic?5 What Happens to Engagement During (poorly managed) Organizational Change? 10 Why do so few get it right?10 Some Key Success Factors10 Q&A5 Norm Baillie-David SVP Engagement - TalentMap Monica Helgoth VP Engagement - Western Region Agenda

3. 3 15 years in business 7,000+ employee engagement surveys since inception 1,000,000+ employees surveyed 500+ employee engagement surveys annually Only 1 Focus TalentMap by the Numbers

4. 4 Sample Clients & Benchmark Award ProgramsTechnology & EngineeringNot-for-Profit & Association Financial Services Health Sciences Other

5. Why the Topic?

6.  “You know, I need to give you some context here. We’re probably a different case, because we (insert one of these) have just gone through are going through are going to go through a significant (insert here): Restructuring Transformation Change  So, we’re probably (insert one): Not like your other clients Different A special case  and engagement will be a challenge” (or something like it) A Typical TalentMap Client My Favorite Client Quote: 6

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8. What Happens to Engagement During (poorly managed) Organizational Change?

9. ENGAGEMENT SCORES GO DOWN, OF COURSE! 9 +/- CLIENT 2013* +/- TM Benchmark Data is rounded to the nearest whole number * Number indicates % Favourable score -12 -9 +2 -7 -12 -23 +1 -4 +2 -4 +1 -6 -4 -14 Note: I am optimistic about the future of my organization is compared to the 2013 statement I am hopeful about the future of my organization Engagement sinks, and is often below benchmark/average

10. ENGAGEMENT SCORES GO DOWN, OF COURSE! 10 +/- CLIENT 2013* +/- TM Benchmark Data is rounded to the nearest whole number * Number indicates % Favourable score -12 -9 +2 -7 -12 -23 +1 -4 +2 -4 +1 -6 -4 -14 Note: I am optimistic about the future of my organization is compared to the 2013 statement I am hopeful about the future of my organization Optimism in the future decreases dramatically

11. ENGAGEMENT SCORES GO DOWN, OF COURSE! 11 +/- CLIENT 2013* +/- TM Benchmark Data is rounded to the nearest whole number * Number indicates % Favourable score -12 -9 +2 -7 -12 -23 +1 -4 +2 -4 +1 -6 -4 -14 Note: I am optimistic about the future of my organization is compared to the 2013 statement I am hopeful about the future of my organization Most of all, employees lose their “sense of place”, because they don’t know what the change will bring. UNCERTAINTY!

12. 12 Are you looking for or thinking of accepting a job with another employer (% Yes)? (THREAT OF ) ATTRITION CAN REACH DANGEROUS LEVELS !

13. MANAGING THE CHANGE ITSELF DRIVES ENGAGEMENT 13 Hypothesized Drivers Compensation Work Environment Performance Feedback Professional Growth Work/Life Balance Information and Communication Teamwork Innovation Customer Focus Immediate Manager Senior Leadership Canadian Leadership Team Organizational Vision Change Management Diversity #2 Change Management Change Management #1 Professional Growth Professional Growth #3 Organizational Vision Diversity Employee Engagement Employee Engagement Previous period drivers highlighted in grey.

14. Why do so few get it right? 14

15. +/- CLIENT Canada 2012* +/- TM Benchmark Data is rounded to the nearest whole number * Number indicates % Favourable score -13 n/a -4 n/a -16 n/a -20 n/a -11 n/a -13 n/a Change Management (Key Driver #2) 15

16. The “Inside” Perspective 16  “Recognizing that we all cannot be privy to all decisions, I would like to feel that change is not always something I have to accept, but rather something I can also input to.”  “Communicate change and reasons for change well before the change is made. For example - dissolving field services without telling area offices.”  “Opportunity to have training and coaching one particular areas once the implementation plans are communicate and we have a better sense of our upcoming role.”  “There needs to be some clear direction on where the company is going so that I can better understand my place in it.”  “With two layoffs in 2014, it's hard to trust in the senior leadership. Even if the top people have changed, a lot of the upper management is still the same, and these are the people who got us into the current non-profitable state that we find ourselves in.”

17.  Unwilling to “lose face” by communicating uncertainty (i.e. not knowing all the answers). Result: if we can’t say everything, say nothing.  Thrill of being “in the know”  Fear of the rumour mill  Many execs assume that the reasons for change are self- evident, so they focus communications on what is changing, as opposed to “why it’s changing”. Most Execs/Leadership Teams Manage Change through Secrecy 17

18. Unfortunately, we don’t see enough Bill Richardsons 18

19. Do you or your leaders:  spend more time in meetings with each other than with their teams?  tend to be less and less visible or accessible?  avoid answering questions about impending restructuring, layoffs, strategy shifts, or worse, use talking points?  Get a “thrill” by being “ in the know”? The “Boardroom Bunker” 19

20. The most common reasons for lower engagement during change are:  Employees don’t understand the reasons for the change (burning platform)  Employees don’t understand the “end state”, i.e. what will we look like after the change.  Employees haven’t had/don’t have the opportunity to influence the change, especially with regards to their expertise.  Leaders are less visible and less communicative precisely when employees crave communications the most.  In a phrase: Uncertainty kills engagement. In Summary 20

21. Some Key Success Factors 21

22. The Burning Platform: An extremely urgent or compelling business case to convey, in the strongest terms, the need for change CLEARLY COMMUNICATE THE “BURNING PLATFORM” – THE “WHY” 22

23. 23 +2n/a 28 -4-2 112 -5+8 17 -2 9 -13n/a 6-3 -5-4 -11-3 -4-6 -9 -4-5 Data is rounded to the nearest whole number * Number indicates % Favourable score +/- CLIENT Canada 2012* +/- TM Benchmark Overall scores include standard TalentMap questions only. MIDDLE MANAGERS ARE YOUR “ACE IN THE HOLE” Get them onboard! Include them early! Get their input, especially on how to manage change in their areas! Most of all, BE TRANSPARENT with them

24.  “Employees watch their supervisors intently, skeptical of management’s commitment to change”  Middle managers operationalize change, while managing employees’ emotions (e.g. anxiety, defensiveness) Grounded Change Model During of Organizational Schema Empowerment G Labianca, B Gray, DJ Brass Organization 11 (2), 235-257 RESEARCH SHOWS MIDDLE MANAGERS ARE THE KEY! 24

25.  Employees need a clear picture of the desired, or end, state.  “What will we look like after the change?” It’s fiction. There is no “after” the change. It’s aspirational. Like the brass ring – we strive for but never will attain. But we strive anyway! CLEARLY ARTICULATE AND RE-COMMUNICATE THE “END-STATE” 25

26.  Leaders’ role: Evangelize the change Demonstrate, by walking the talk. Be the first to live with the temporary inconvenience Share the vulnerability. Include subordinates in continuous improvement.  Managers’ role: Operationalize. Problem-solve. Share the vulnerability (up and down) Include subordinates in continuous improvement. LEADERS: GET OUT OF THE BUNKER! 26 Employees’ role: Embrace the idea, but question the modality. Share ideas for continuous improvement Have an open mind. Don’t expect all the answers.

27. EventFormatTopicDate OMAA – Ontario Municipal Administrators’ Association, Kitchener ConferenceEmerging Practices: The Economic Development Transformation October 14 HR Technology Conference, Las Vegas ConferenceThe World’s Biggest and Best Conference on HR technology for HR Executives October 18-21 People Analytics CanadaConferenceDrive People and Organizational Performance with HR Analytics October 27-28 TalentMap Monthly Webinar Series Live WebinarHow To Improve Engagement Through Better Teamwork (and It’s Not Through “Team-building” Exercises) October 29 Top Employer Summit, Toronto ConferenceCanada’s Top 100 Employers with keynote speaker Bill Clinton November 16-17 UPCOMING TALENTMAP LEARNING SESSIONS

28. THANK YOU! QUESTIONS AND DISCUSSION 28 Monica Helgoth VP Engagement – TalentMap West mhelgoth@talentmap.com 1-888-641-1113, x515 Norm Baillie-David SVP Engagement nbaillie-david@talentmap.com 1-888-641-1113, x504