Rather than using the carrot-and-stick approach to employee health, Procter & Gamble and other companies are trying a new tack
Thirty-five years ago, in his classic Management: Tasks, Responsibilities, Practices, Peter Drucker declared that the means by which most people had long run their organizations—through a mix of perks and punishment, rewards and reprimands—was all but dead.
"The basic fact," Drucker wrote, "is that the traditional…approach to managing, that is the carrot-and-stick way, no longer works."
It was striking, then, to read a few weeks ago of Whirlpool's decision to suspend 39 workers who had claimed to be nonsmokers—apparently in an attempt to avoid paying a $500 surcharge on their health insurance—but then got caught puffing away outside a company refrigerator factory in Indiana.
Raising a Basic Question
The story set off a flurry of debate about the legality of certain corporate wellness programs, how far companies should go in regulating private behavior as they seek to hold down medical expenses, and whether the time has come simply to break the link in this country between health insurance and employment.
But to me, the episode raises a far more basic question, at least from a management perspective. The real issue: What's the most effective way to motivate people to be their very best?
For its part, Whirlpool (WHR) has noted that it is "just one of a growing number of companies waging war on unhealthy habits." In fact, according to the consulting firm Mercer, 16% of large U.S. employers vary their workers' insurance premiums based on smoking status.
Using a Coach-and-Stimulate Approach
And yet others take a different tack. Rather than carrot-and-stick, it's more coach-and-stimulate. Among the finest programs I've seen along these lines is one that's been used by Procter & Gamble (PG), PepsiCo (PEP), Merrill Lynch (MER), Dell (DELL), and others. Called Corporate Athlete, it doesn't so much try to wage war on bad habits as it does inspire good ones. "It's an investment that we make in our employees," says Anand Prasad, P&G's director of global learning and development. "We know that by doing this, our people will become healthier."
Corporate Athlete teaches participants to be fully engaged in what matters, so that they're able to perform at a peak level in demanding, high-stress situations. It trains them to build healthy practices into their daily rituals and routines and to maintain a sense of control and balance in their lives. And it instructs them, above all, to manage and maximize their energy—not just physical, but emotional, mental, and spiritual. "It really empowers you," says Jim Loehr, a psychologist and co-founder of the Human Performance Institute, the Orlando-based outfit that developed the Corporate Athlete system, in part, by working with sports professionals.
Or, as Peter Drucker might say, it provides people with the tools to more successfully "manage oneself." Once they're given this guidance—and, implicitly, the responsibility that goes along with it—many change the way that they go about things. Prasad, for example, says that at age 53, he is more fit now than he was at 35. He used to exercise before, but now he does so in a much more purposeful fashion. "There is a constant improvement plan behind it, a tracking plan behind it," Prasad says. "There is accountability in place."
Giving Up Big Dinners
He eats better, too. He used to skip breakfast. Corporate Athlete made clear—by explaining the underlying science—that having a well-balanced meal in the morning is what allows you to keep up your metabolism and concentrate through the early hours of the day. Prasad has also given up big dinners, having recognized that they keep you from sleeping well, which robs you of rest.
Thanks to Corporate Athlete, Prasad says he has discovered how to increase his mental energy as well. He has stopped multitasking so much, disciplining himself to give his complete attention to one thing at a time, to be fully present in the moment.
Does any of this accrue to the bottom line? Undoubtedly, it does. Besides needing less medical care, a healthier, happier workforce is bound to be more productive and turn over less frequently. Since 2003, P&G has put more than 8,500 people through Corporate Athlete. Survey results show that 61% who've taken part say they're more focused at work; 59% report being more engaged at home; and 51% indicate that they've made gains in their physical energy.
Spreading the Message to the Assembly Line
The company is now looking to spread the benefits throughout the organization. So far, office workers have been exposed to Corporate Athlete. But P&G is hoping to tailor a version of the program to the schedules and work environments of its manufacturing employees.
As for how many have quit smoking or given up other harmful predilections, Prasad says that P&G doesn't monitor that—nor does it plan to. "We've gone into this with the belief that people will develop the habits they need to once they have the awareness," he says. "Those we recruit are highly smart. We think they'll make the right choices."
Many companies look at their employees and, in regards to health care, see them as little more than liabilities. But a program such as Corporate Athlete treats them in a manner that Drucker would surely have approved: as valuable assets.
And when they're viewed that way, you needn't worry so much about whether they'll smoke. Instead, you can just watch them catch fire.