We have a summer book club here in the office, and the book we’re reading now is The Power of Habit: Why We Do What We Do in Life and Business, by Charles Duhigg. You should check it out.
In the book, Duhigg describes what he calls “habit loops” that dictate much of what we do. The pattern is Cue –> Routine –> Reward, and it drives our behavior in ways we are sometimes not even aware of. By subtly adjusting cues and routines, and linking them with satisfying rewards, Duhigg argues, we can break ourselves of destructive habits and improve our lives exponentially. We create a craving for constructive, rather than destructive, patterns in our lives.
The same model applies to businesses. Transforming one bad habit, Duhigg notes, usually causes a ripple effect that brings with it a systemic positive change and the creation of a host of constructive habits.
One of the examples Duhigg gives of this is the change that Paul O’Neill created when he became CEO of Alcoa in 1987. O’Neill led the company to record profitability by simple addressing one key bad habit. In this case, adjusting company attitudes toward safety.
“I knew I had to transform Alcoa,” O’Neill told Duhigg, “But you can’t order people to change. That’s not how the brain works. So I decided I was going to start by focusing on one thing. If I could start disrupting the habits around one thing, it would spread throughout the entire company.”
The key habit, or “keystone habits” as Duhigg calls them, are influential habits that act as pacesetters for our lives and businesses. If we can establish good keystone habits, he argues, we can significantly improve our lives and businesses. It is keystone habits, says Duhigg, that “explain how Alcoa became one of the best performing stocks in the Dow Jones index, while also becoming one of the safest places on earth.”
How can you tap into this positive habit loop? By connecting cues and desired behavior with appropriate rewards. This is, in fact, why recognition and reward is such a powerful motivator for organizational change, and such a powerful tool in your arsenal for managing culture. By rewarding engagement, we encourage a habit of engagement. When we are able to create a strong, tangible reward for living company values and helping to achieve organizational goals, we establish a habit loop for our employees. We create a craving for positive feedback and appreciation that leads us to do more to further organizational goals.
By practicing this habit, we enter a recognition/engagement feedback loop that brings with it tangible benefits for both the employee and the organization. Just look at the infographic below.
The institutional habits of recognition and appreciation let us reinforce company goals and values, and improve employee well-being and interpersonal relationships. The data that recognition yields offers us the ability to manage talent and culture more effectively.
This all results in improved employee engagement–and I think we’re all very aware of the significant advantage an engaged workplace offers in terms of reduced turnover, improved customer relationships, better productivity and overall increases in profitability and shareholder value.
I think it is safe to say, it’s a habit loop we’d all like to get into.