Leading With Gratitude: Eight Leadership Practices for Extraordinary Business Results

And the last one we wrote was about 10 years ago. We were sitting around with our good friend Marshall Goldsmith, who's an executive coach and author of "What Got You Here Won't Get You There," and as we were chatting it really became quite evident – Chester and I do a lot of executive coaching too – that despite all we've written on recognition, rewards, leading with positivity, carrots versus the negative, that just about every manager and senior executive we were asked to coach either had no time for gratitude [or] just didn't do it very well.

And so the idea was: how do we get now past this? We know it's good for us. Well, great! Then why aren't we doing it, what's the psychology of what's holding us back? And how do we do it effectively in this modern age, where more people are working remotely, we have gig employees, we have Gen Z and millennials coming into the workplace – how do we manage in a way that is effective and people understand the value that they're creating and that we appreciate that value?

It's a simple idea and yet so few of us do it well.

Rachel Salaman: And that's where your book comes in. You mentioned changes to the workplace over the last few years; what changes have you seen to the way appreciation is handled by businesses over the last few years?

Adrian Gostick: One of the things we're saying is that the way that leaders are taught this idea has to change, and is beginning to change in many organizations.

It's not just about, "Hey thanks everybody, thank you, thank you, thank you." Which is meaningless, unless you know specifically what I've done. And so really the foundation, what we're seeing with appreciation that's being handled in an effective way is that managers are being trained to actually see value that's being created, to solicit and act on input, but done in an effective way to develop more empathy for their people and the struggles they’re going through, and when the challenges are overcome, the successes that are celebrated together.

And so what we're seeing is that there's a lot more about seeing the value that's being created than just the thank you – that's important too, the thank you is important but what's more important to me, especially these younger workers that are coming in, is that my manager is noticing the challenges that I'm facing and is noticing this unique value that I'm bringing.

It used to be we would say, "Well, we treat everybody the same because that's fair." And we've learned that's a terrible way to manage people! Each of our people are very unique and they have unique drivers. And great leaders and great organizations are tunneling and focusing their gratitude toward those unique drivers in people.

Rachel Salaman: What research is your new book based on?

Adrian Gostick: We have now – Chester Elton, my co-author and I, in "Leading With Gratitude" – surveyed more than a million employees with research partners, including Willis Towers Watson. Alone for this book we are pulling as well on a 300,000-person survey we conducted in the worst of the last recession, which is '08 and '09, and we were looking for those organizations that outperformed their peers in that last recession.

And so, in good times and bad, we were trying to find those drivers that really created outstanding performance. And so what we found was that in those highest-performing organizations [was] that managers recognized excellence – and that's how their employees defined this over and over again. When I go above and beyond, my manager notices and rewards that behavior in a way that is meaningful to me.

Rachel Salaman: So just to get to the nitty-gritty of this, what difference does gratitude make to team members, to team leaders, and also the culture of the organization?

Adrian Gostick: What we found with our research, and again hundreds and thousands of employees studied, was that in those teams where a manager was able to give more frequent, specific recognition – so it's not just, "Hey, thanks everybody." It was specific to Rachel: "That was a great podcast yesterday. I thought it really fascinating how you went down to… and oh, you actually listened to my work, oh, you actually know that I add value. And this is why it's important to our organization." So, when managers did this well, and they were grateful in very specific, meaningful and frequent manners we found that employee attrition, turnover as we call it in the U.S., is typically about 30 percent to 40 percent lower in those organizations where gratitude is significantly higher.

We also found that employee engagement is on the measure of two or three times higher where employees felt recognized for above-and-beyond work on a regular basis. We also found some interesting things – now you may assume, "Well that makes sense, that employees would feel more engaged and more satisfied, less willing to leave an organization when they were feeling valued for their work on a regular basis," but we also found a very strong correlation to customer satisfaction: that customers are more satisfied working with teams where there's a higher level of employee gratitude to each member and top-down and bottom-up and side-to-side, etc.

And we also found, interestingly, a very strong correlation to higher levels of accountability and trust in teams where there were higher levels of gratitude. So, it's the rising tide – everything got better when gratitude got better.

Rachel Salaman: That seems very compelling. So if we accept that thanking team members is a good idea, what different forms can that take, in practical terms?

Adrian Gostick: One of the things we talk about in here is personalizing recognition to an individual.

One quick little story, when Chester and I began working together, it was 20 years ago, we were working for a large corporation and we wrote the company's first leadership book. And I'd done a lot of the work, so Chester wanted to get me recognized and went to the CEO, and Chester thought, "Well, Adrian probably would like to be recognized like I would like to be recognized." Chester's top motivators were ideas like friendship and fun, and teamwork. He loves being in a big crowd with people he doesn't even know and meeting them and creating new friendships. To me, that's probably the last thing I'd like to do in the world!

To me, my top motivators are ideas like creativity, autonomy and family. So very different ways we come at work, so how Chester wanted to get me recognized was how he wanted to be recognized.

So, I sat through this gala banquet night with all the salespeople who I didn't know and I didn't work with. At the end of the night the CEO presented me with a watch. I don't wear a watch, but Chester does and he loves watches. And so, we realized later, this actually began a lot of our work on finding ways to recognize people that is meaningful to them. Sometimes we put on our own glasses and think, "Oh, Stan is going to love being recognized how I love to be recognized."

So, what we find is that we find out what each person's motivators are. In my case, if they'd have recognized me with actually more work to do, give me a chance to lead a team, use my creativity and autonomy, or a little time off to be with family, that would have been very powerful to me and a memorable event.

For Chester, how I would recognize him with his motivators is maybe send him to a conference to meet new people, to network, to learn, to grow. We have to find out what drives our people in order to help gratitude be most effective.

Rachel Salaman: Yes, it's clear that this kind of thanks really has to ring true. And that is what much of your book is about. First, finding out what people are really contributing, what you call seeing; and then proving that you value that, and that's what you call expressing. So, one of your seeing tips is to assume positive intent: what does that look like in a typical workplace?

Adrian Gostick: It's an interesting one because we didn't expect this to come out in our research, but we found to create a grateful culture you've got to create this idea of positive intent, which basically means people are going to come with problems all the time. And we interviewed a lot of managing directors, CEOs of major Fortune 500 companies, and this was a really interesting one that we heard quite often.

In fact, Hubert Joly, who is the Executive Chairman of Best Buy, saved Best Buy when so many retailers were going out of work. [He] told us, "I may be the most naïve person in the world, but I assume everybody comes in to work wanting to do a good job. And so when somebody comes to me with a mistake, I realize that they weren't looking to bring our organization down." So he says, "I consider these a learning opportunity." Somebody will come in and say, "Boss, over the weekend our system went down and this is what happened." And he says, "Terrific! What can we learn from this, how can we make sure this never happens again?"

He says, "Do you think people are excited to bring me problems? Yes, they are because they know I'm going to see them as a positive way to improve." Now, what happens when that IT guy comes in and says, "Boss, the system went down." And the boss says, "Why wasn't it backed up? Why didn't we have a duplicate system? Why didn't we do this?" And he starts pointing fingers.

Well, the IT guy is going to do everything humanly possible to never admit a mistake again, and that doesn't help any organizations. They're not going to be able to fix any problems if employees aren't willing to bring them forward.

So, one thing we found is that being grateful when people come forward with issues is a tremendously positive way to create a culture of gratitude, but also a culture where there is transparency and people are willing to share, because, as one CEO told us – this was Alan Mulally, CEO of Ford for many years, a terrific leader – "My people have to understand they have a problem, they are not the problem." And that is when great things start happening.

Rachel Salaman: But while most people probably do have positive intent, what happens when someone's intent isn’t positive? Do we need to keep that idea in mind as well just in case we'd otherwise come across as undiscerning or maybe a pushover?

Adrian Gostick: It's always the worry, that there's a certain segment of the human population that's going to take advantage of you, and I don't exactly know what that percentage is because it varies based on so many factors. Let's call it 1 percent of the human population [that] no matter what you do is not going to be happy, or they're going to try and do something malevolent, something that is not helping your organization.

But do you run your organization for the 1 percent or for the 99 percent? And that is what Hubert Joly of Best Buy explained to us. He said, "Yes, I'm going to be disappointed now and then but 99 times out of 100 I will be thrilled that everybody is trying their best."

And you see what happened when Hubert Joly took over: Best Buy was losing $1 billion a year, and I think it was three or four years later they were making $1 billion a year in profit – a remarkable turnaround that cannot happen without the full buy-in of your employees, the people who care, and to do that you've got to start with this really positive environment.

Yes, now and then there's going to be some people who try to take advantage of you, but you can't run an organization for those people. You have to find those people and you have to be pretty quick about removing them.

Rachel Salaman: Yes, that's a really good point. Another of the seeing tips is "walk in their shoes." This is a bit similar to "assume positive intent" as it helps us practice empathy. What are your top tips for walking in someone's shoes?

Adrian Gostick: One of the great stories we heard as we were interviewing people came from a hotel chain. The senior executives at least once a year were required to spend a full day working in a job that was interacting with clients. They weren't allowed to work with the pastry chef, no. They had to work in housekeeping, they had to work on the front desk, they had to work on the call center, they had a different job every year that would interact… Every senior executive.

One of them said, "I spent a day working with our housekeeping people. You punch in early in the morning, you leave your phone in the locker, you put on the uniform and up you go and you start cleaning rooms. It was an amazingly hard job." And he says, "I saw what my folks were dealing with, so I developed empathy for what they were working with and immediately I wanted to give them ideas about how they could make their jobs better. And I realized I've been here for three hours, I don't have that right yet. What I could do is ask them about their work and what could make things easier. I know it was just eight hours but I developed an empathy and I was also able then later, during that next coming year to keep thinking about that experience and say, 'I think our housekeeping people would benefit from this or that because I had walked in their shoes, albeit just for a short time.'"

One of the things we found in our research is those managers that had the highest performance spend anywhere up to 75 percent of their days walking around, being with their people, helping them. And one of the first questions they ask is, "What can I help you with? And what do you want to talk about?" Instead of coming to them saying, "Hey, did you get that report out that I asked for?" No, it's, "What are you working on and what can I help with?" And it just changes the thinking.

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Rachel Salaman: Moving on to expressing gratitude now. In your book, you say that, "Like ripe bananas, gratitude does not keep." So, what should we know about the timing and frequency of expressing thanks?

Adrian Gostick: What we find is that in our research it's typically about every seven days, in the best workplaces the people said they feel praised and recognized, "My manager was grateful for my unique work."

And again, this wasn't a generic, "My manager walked through the office telling everybody great job everybody, everybody does such great work around here!" That means nothing.

Back when we were in school and the significant other that we were hoping would give us some attention, the girl or boy that we liked, if that person had said, "I like all the boys in my grade." Would that have been meaningful? No. We want specific attention placed on ourselves, we all do, we are all humans. We want to know that we are unique and we are bringing value, that is what gratitude is all about.

Celebration is where you celebrate everybody, and that's important too. But a lot of managers get this mixed up, they say, "I don't like to single individuals out. I just take the team out to lunch once a month or so." And that's not recognition, that’s not gratitude – that's a celebration.

And so that's one of the things that we have to remember, that it does not keep, it has to be frequent. We have to recognize all those small steps along the way.

Rachel Salaman: How can we keep it fresh if we are acknowledging contributions as often as once a week?

Adrian Gostick: That's a good question too and you're right. A lot of managers worry about this, they say, "Gee, I did recognize Samantha last week for hitting her numbers and I sent her an email, so what do I do this week?"

And it is a little like taking the stairs in your house, we recognize typically the above and beyond, so if Samantha hits her numbers and she is mentoring a younger worker, then all of a sudden that's something more again. And perhaps I'm going to present an award that is meaningful to her.

So typically, you are looking for the stair approach. If it's expected behavior then it becomes praise. So, what you think about this is you praise effort but you reward results. So when somebody goes above and beyond you, reward.

The worst thing you can do though is just, say, have say a stack of Starbucks cards. I heard one manager had a stack of coffee cards that he would give out. So it didn't matter if you cleaned out the supply cabinet or you saved a $1 million client, you got the $5 coffee card. And he said, "Oh, people love it." I asked him why don't you go and check with your people and see how meaningful this is to them.

So, he came back after a few days and said, "I've chatted with a few of my folks and a couple of them really like it." And I said, "OK, a couple. Did you have some dissenters?" He said, "Actually yes, I did. I had a couple who don't really drink coffee. One woman told me, 'I really don't like coffee so I gave the Starbucks card to my neighbor, he really loves them.' So, I realized I'd been recognizing my employee's neighbor for years. I realized this might be nice for some of my people, it's not working at all for others." We have to figure out ways to tailor rewards that are going to be meaningful to my people.

Rachel Salaman: On this topic, in the book you talk about your motivators assessment, which is really helpful for this. Can you talk a little bit about what that is and how it helps?

Adrian Gostick: We do have what's called the motivators assessment. It was built by a team of psychologists – you can find more about that at thecultureworks.com, where we hold the motivators assessment.

What it does is it spits out your motivators from one to 23. Everything from creativity to money, to excelling, to variety in your work – what are the things that give you that skip in your step?

Until we developed this, there were a lot of issues, within our team even, [that] we didn't really understand. Chester's number three motivator is "fun," but we had a guy working for us who was one of our senior partners, fun was number 23 out of 23 for him. So, they would sit in meetings together and Chester would be cracking jokes and asking people about their weekends. And Steve, our partner, would be drumming his fingers on the table just thinking, "When is this going to end so we can get some work done?" As they took their motivators assessment there was this "aha!" moment where they went, "Oh, OK."

And Steve realized, "I want Chester in my meetings, he knows everybody, he's got great ideas but I need to be more patient and understanding that he is going to act in this way because that is motivating to him."

And Chester went, "OK, when I'm working with Steve, I need to be more focused, more on target because he's getting frustrated with me taking us on different journeys of fun." And so, it's been very helpful to not only understand ourselves, but more importantly, those we work with, and what motivates them and keeps them excited in their jobs.

Rachel Salaman: Another part of tailoring rewards is getting the size of them right. What do we need to know about levels of rewards?

Adrian Gostick: This is a really interesting part of recognition, of gratitude – that idea of commensurate. Because a lot of times we'll hear this from an employee and sometimes we want to put a dollar amount on it. If it's not several thousand dollars or euros, typically find something that's tangible to give the person, or to do for the person – whether it's time off or a chance to lead a new project or a tangible reward that might be meaningful to them, if they're a big cyclist maybe something that relates to that.

Many times, we will try to put a dollar amount on this, OK. Sue put in hundreds and hundreds of hours of overtime to update the SAP system. My gosh, what a great job, let's add $200 to her next paycheck. Then she gets this and after taxes she says well, that wasn't worth it, versus something that was very meaningful to her – again if she is a cyclist maybe it's the latest in headgear that's really cool and she thinks, "You really cared, you really thought about me, and something that means something to me."

Or, "Sue, I want to make sure that for the next three Fridays [you] take those Friday afternoons off, be with your family. That is on us because you've spent so much time…" Because family is one of her top motivators.

You've got to get to know your people to be able to do that and a lot of managers think, "Oh, that's just too much work. I've got 20 people who work for me!" What we find though is the dedication, the engagement that comes from that is off the charts, if you really put the work in.

Rachel Salaman: In your chapter on values you say that gratitude is one of the most effective ways to reinforce a leader's commitment to a company's core values. So, I was wondering, if the thanks is about the leader's commitment and about the company's values, how do we also make it about individual? I wondered if you could give an example.

Adrian Gostick: That's a great question because we see, unfortunately too often, where managers will just walk through the factory floor, the office, wherever they're working, and throw out these meaningless, "Good job everybody!" And they think they're lifting morale and they're really not.

And so, what we've seen, organizations that are very effective at this are finding ways to align values with the individual's values, especially if the person is living that value.

For example, we worked with a large hotel chain once where an employee had turned in some money that she'd found down in the laundry. She'd found a big wad of cash in a pillowcase and rushed up to the general manager's office and turned it in.

Well, what integrity! And that is one of the hotel's core values, so instead of just thanking her or giving her a little reward, he went down the next day into the laundry and gathered everybody around, "Everybody stop what you're doing and come on over here." And he thanked Rosemary for her example. And he told the story of her bringing the money up and said, "If hotel guests can't trust us, they're not going to stay here." And he talked about the value of integrity.

But he also mentioned – and we were able to recreate this in one of our videos because we interviewed all the people involved, and he said he talked a lot about her integrity, "Rosemary is always on time, she's always watching out for her fellow employees, you know how dependable she is!" And everybody was nodding their heads.

It was really interesting, he said, "As I talked about her value of integrity and how it aligned with the corporate value of integrity it became alive." He said, "Do you know how many memos I've had to write about how we've got to be trustworthy? But in that short moment, it took about two minutes to do this little gathering, and I gave her a little award. Isn't it amazing how everybody was paying attention, everybody got it? That it takes personal integrity, aligned with our corporate integrity, and we're going to get recognized around here if we do the right thing."

Rachel Salaman: That's a fantastic example. You include an interesting chapter on peer-to-peer recognition, what forms can that take and what are the benefits of it?

Adrian Gostick: This is what we're seeing a lot more. In fact, peer to peer recognition and gratitude is overtaking top down. And a lot of times it's because managers are just so busy – whether you're managing five employees or 20, you probably have your own deliverables, and so there's very little extra time.

So when we start teaching this, an organization brings us in to help them understand how to do this, the first typical pushback is, "I just don't have time. I'm already working a 60-hour week." The great part about peer-to-peer gratitude is that it doesn't take any time on your part, you're just simply providing a few tools.

Maybe you're giving them stacks of thank you cards, maybe you're giving them a small budget and explaining to them how this should work – it's not for, "Thanks for sharing your lunch with me." It's nice, but it's, "Thanks for being dependable, for taking that shift when I needed you to." Or, "Thanks for helping me hit that client deadline, that was huge."

Chester and I have a little team, we probably have about 12 employees or so at The Culture Works, and Chester is in New York and I'm here in Utah, and I wasn't even supposed to be in the office one day, I was coming back from a trip, I got the early flight and landed early and just had to run into the office to grab something before I headed home. And as I got to the office, my team was in a little horseshoe. They were all standing around and I was wondering what was going on, and as I walked in it was a recognition moment.

Chris, one of our trainers, was thanking Barbanne, who is our logistics person, for saving his bacon. Chris had got to a city and realized he had no training materials, he had nothing to work with and the materials hadn't arrived, so he called in a panic. It's after five, Barbanne is still there and said, "I'll take care of you."

She grabbed some materials and found the last FedEx location out by the airport which would take a delivery at 7 p.m. and at 9 o'clock the next morning Chris had his materials in a different city, and he felt, "Oh my gosh, I'm saved."

So, he is recognizing her. He's giving her a little something and the team has gathered around and he's just thanking her for her dependability, for her ownership of that issue. I called Chester later and told him what had happened and said, "We own the company, we didn't know about it, we weren't invited and wasn't it great that it was happening – a peer was recognizing a peer and it was most meaningful because she knew that he knew exactly what she had done." And it was very powerful because it was peer-to-peer.

Rachel Salaman: So, for leaders who would like to practice more gratitude at work what do you suggest as a doable first step?

Adrian Gostick: One simple thing that managers can start doing is writing a few more thank-you notes to their people. They may seem old school but it's a very powerful way to capture specifically what the person has been doing. Not just, "Hey, Andrea, I sure appreciate all you do." No, "Andrea, I want to thank you so much for helping push our process on that new customer integration system." And you explain how meaningful that is to the organization.

So that's a very simple thing people can do. It's putting this on their reminders to at least once a week be reaching out and thanking people, whether it's in their staff meetings, making it the first part of their staff meeting. One manager we talked to integrated this, he said, "I took over an organization that had lots of silos." They had about 60 people in total and they were in five different teams and he said the teams did not work well together at all.

He said, "The first thing I did, when we had weekly staff meetings with all sixty, an update on what was going on, we began with recognition and it wasn't me recognizing. I would call on people out of the audience and I would ask them to recognize somebody in another department who had helped them the previous week."

So, John in sales was asked who are you going to recognize today, and he said, "I think I will recognize Aaron in accounting, because when I sell a deal Aaron always jumps in and talks to the client and makes them feel great about their purchase and gets the accounting working, so I want to recognize Aaron." So, the boss would give Aaron a gift certificate, and he said, "It was just a terrific way to break down silos, and everybody was coming in looking for somebody else in another team to recognize. All of a sudden, we were one big team, because everybody was worrying about who else they could help during a given week."

It was a terrific little idea, but there are so many ideas and we have lots more in "Leading with Gratitude" that we throw out from real managers we've interviewed.

Rachel Salaman: Adrian Gostick, thanks very much for joining me today.

Adrian Gostick: Rachel, it was my pleasure.

The name of Adrian's book again is "Leading with Gratitude: Eight Leadership Practices for Extraordinary Business Results" and it's co-written with Chester Elton.

You can hear an Expert Interview podcast with Chester talking about "The Carrot Principle" on the Mind Tools site where you can also find a Book Insight review podcast about Chester and Adrian's book "All In."

I'll be back in a few weeks with another Mind Tools Expert Interview from Emerald Works. Until then, goodbye.