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Two Underutilized Levers for Unlocking Workplace Potential.

In the world of business, the ultimate goal is to increase revenue. Historically, this quest has focused on external elements like increasing sales, controlling costs, or expanding into new markets. However, there is a significant internal factor that impacts revenue:


Employee Engagement.


Employee engagement is the emotional commitment of employees to their company's goals and values. Engaged employees are more productive, innovative, and dedicated, leading to better business outcomes. But how can organizations increase employee engagement effectively?


The Two Hidden Levers of Employee Engagement


There are many strategies to boost employee engagement, but two critical levers often go underutilized:

Psychological safety and a Growth mindset.

Psychological Safety


Harvard Professor Amy Edmondson coined the term psychological safety.

It refers to creating a workplace where employees feel safe sharing their ideas, opinions, and concerns without fear of consequences or reprisal. This environment encourages open communication and fosters innovation.

Growth Mindset


Psychologist Carol Dweck introduced the concept of a growth mindset. This mindset fosters resilience and a passion for learning, allowing individuals to embrace challenges and view failure as an opportunity for growth. Employees with a growth mindset are more likely to seek out new experiences, learn from their mistakes, and continuously improve.


The Impact on Profitability


Investing in a culture that promotes psychological safety and a growth mindset can lead to extraordinary transformations within an organization.

Let’s explore the key elements driving the strong association between employee engagement and financial performance:


Customer Loyalty: Cross-Selling and Up-Selling


About 60-70% of profit growth can come from cross-selling and up-selling to existing customers. It costs up to five times more to acquire a new customer than to retain an existing one. Highly engaged employees, already close to customers, can champion these efforts, promoting greater profitability.


Employee Retention


Organizations fostering a growth mindset and psychological safety experience lower staff turnover. Employee turnover is costly, ranging from 33% to 150% of the ex-employee's salary. Reducing turnover significantly benefits the bottom line.

Total Cost of Ownership (TCO) Reduction


Engaged employees are more creative and innovative, thinking outside the box without fear of failure. This leads to improved team performance and bold decisions like build versus buy, significantly reducing the cost of ownership. Studies show engaged teams can boost company profitability by 21% through TCO reduction alone.


Time to Market: Cost of Delay (CoD)


The economic cost of project delays is significant. Disengaged workers cost U.S. businesses over $100 billion annually in delayed deliveries. A culture of honest communication and proactive problem-solving can prevent such costs. Motivated teams help ensure timely project deliveries, avoiding delay costs.

Service Disruption Costs


Research by the DevOps Research and Assessment Team (DORA) at Google Cloud found that highly engaged teams have a change failure rate of just 0-15%, compared to 46-60% for low-performing companies. For a Fortune 1000 company, avoiding downtime can save $9.6M to $222.6M annually. Elite IT performers can avoid $13.7M in downtime costs per year, while high performers can avoid $31.4M.


Insights from Gallup


Dr. Jim Harter, Chief Scientist for Gallup’s Workplace Management and Wellbeing Practices, led a large-scale study investigating the relationship between employee engagement and business results. Covering more than 82,000 business units and 1.8 million employees across 230 organizations in 49 industries and 73 countries, the study revealed compelling insights.

"Companies constantly evolve, and they need new ideas all the time. Engaged employees are much closer to the best ideas" says Dr. Harter. "They're thinking about the whole company and how they fit into it, and their ideas lead to better decisions."

The study highlights:


  • Companies in the top quartile of employee engagement have a 3.9 times greater earnings per share growth rate than those in the bottom quartile.

  • Disengagement leads to lost productivity, costing businesses over $300 billion annually.


Turning Insights into Action


To achieve these benefits, executive leadership must commit to a transformative strategy that includes fostering psychological safety and a growth mindset. Here are actionable steps to get started:


  1. Lead by Example: Leaders should model behaviors that promote psychological safety and demonstrate a growth mindset.

  2. Provide Training: Invest in training programs that educate employees about these concepts and how to apply them.

  3. Encourage Open Communication: Create channels for feedback and ideas, ensuring that employees feel heard and valued.

  4. Recognize and Reward: Acknowledge efforts and successes in applying these principles to reinforce their importance.

By committing to these actions, organizations can create a thriving culture that enhances employee engagement and drives profitability.


Partner with Us for Success


Effilor is a management consulting firm specializing in organizational strategy, leadership development, and performance enhancement. We work with ambitious, learning-oriented leaders and organizations, focusing on delivering measurable outcomes.


Reach out to us at Effilor Consulting. Together, we can build a culture that fosters psychological safety and a growth mindset, driving engagement and profitability.



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