Executives are fond of iterating well-worn phrases that have become so overused, so trivialized, that they’ve been rendered meaningless. One of my favorites: “Our greatest asset is our employees.” Wish I’d received a quarter every time I’ve heard that one.

Having said that, the really smart companies take this very much to heart. Especially in times like these. Real corporate leaders—especially in struggling companies and in tough times—understand that their employees can make or break their businesses.

Another inspiring leadership article in Forbes magazine: “How Employee Engagement Turned Around Campbell’s,” proves the point in concrete, quantitative terms.

The gist: when current CEO Douglas Conant arrived at Campbell’s from Nabisco in 2001, he found himself involved with a “beleaguered old brand.” Declining sales, increased competition and disengaged employees spelled potential takeover, if not doom. Sound familiar? At some point, many brands, including great heritage ones, experience these issues.

Conant’s strategy? In his own words: “To win in the marketplace, we believe you must first win in the workplace. I’m obsessed with keeping employee engagement front and center and keeping up energy around it.” How did he implement his strategy? By instituting the “Campbell Promise.” Conant replaced 300 of the company’s 350 management level people within the first three years. Half of the new leaders were promoted from within the ranks. The message resonated.

In the most memorable quote from the article, Conant stated: “I saw that in all of the elements related to culture building, engagement correlates closest to shareholder returns. We can use engagement as a tool to measure our progress in building a high-performance culture and to set higher standards for our leaders.” That’s what I call focus—not to mention a breath of fresh air.

The number #1 criterion for managers who are evaluated yearly: their ability to inspire trust from their employees. The company also surveys all of its 580 work groups annually. Managers review survey results with their superiors, also updating them on their progress in achieving clearly defined goals.

Employee achievements are celebrated “at a high level.” Conant personally sends out roughly 20 thank-you notes daily to employees. He has lunch with about a dozen employees once every six weeks, to engage with them, getting their feedback, hearing their problems and perspectives on the business.

Results?

• Campbell’s has gone from the worst Fortune 500 company ever polled for employee disengagement to one of the best. In 2002, 62% of Campbell’s employees said they were not actively engaged and 12% stated they were actively disengaged. Today, 68% of all Campbell’s employees consider themselves to be actively engaged. Just 3% state they are actively disengaged. “That’s an engagement ratio of 23-to-1, and Gallup considers 12-to-1 to be world-class.”
• Campbell’s has increased earnings by up to 4% per year over the past eight years (excluding acquisitions and divestitures); earnings per share are growing 5% to 10% per annum.
• Cost-cutting measures, smart innovations and increased marketing have played a role in Campbell’s success, but the evolution of a new company culture is the #1 reason for the company’s dramatic turn-around.

Conant: “Besides our improved financial and market performance, the biggest benefit has been the revitalization of our whole culture. We’re performing at a higher level, we’ve become more innovative and we’ve become more self-governing. That all contributes to our being on track to have one of our best years ever, despite the worst economy of our lifetimes.”

Questions:

• Do you think, especially in these hard times, companies would benefit from adopting Douglas Conant’s strategy of valuing employees, increasing employee engagement and building a unique culture?
• Do you think employees are the most important asset in businesses? Or do you rate other assets: financial working capital, cash flow, innovation and controlling costs as having equal or greater importance? If so, why or why not?
• Do you know of other companies that have enjoyed success because they are committed to employee engagement?

I’d love to hear from you.