The Carrot Principle

Free Press

We were gratified to see The Carrot Principle catch fire when it was first published in 2007. Readers responded to the fact that the book offers scientific proof of the power of recognition -- providing more than just the case studies and the 'how to's' we presented in our previous books. We were also pleased to see the idea receive positive press in venerable business publications such as The Wall Street Journal, The New York Times, and Fortune.

The book has now been translated into twenty languages and has sold strongly globally. But what we find most gratifying is to know that, in this economic downturn, the Carrot philosophy has never been more relevant. It has been incorporated into thousands of organizations worldwide by leaders who realize they will make their organizations stronger, more productive and profitable if they focus on their employees and acknowledge their great work. These executives are testifying to the results their companies are seeing.

Michele Cox of the large health care provider Quest Diagnostics recently shared the positive improvement her organization has seen in employee engagement, and spoke about how well their managers have responded to training in the Carrot approach. "We are a large company with 2,000 locations and 40,000 employees, and our key focus is in reducing turnover and increasing engagement. We made the switch from cash awards to gifts and instituted training, starting with just one hour of recognition training for our managers. They wanted more. Recognition has really begun to integrate into our culture and engagement is increasing by the minute."

Mark Servodidio, executive vice president for Avis Budget Group, reported that the training his company has done in the Carrot philosophy has also paid off. He explained that, for each point Avis can reduce employee turnover, the company saves $3 million. Mark pointed out that the company has found that its locations with the highest employee engagement scores have the lowest employee turnover. "And our top performing locations," he said, "have seen an increase of almost 200 percent in the use of our recognition program since 2004."

Recently we were thrilled to pique the attention of one of the world's foremost leadership training companies, FranklinCovey, which in 2008 adopted The Carrot Principle book and course in their global training network.

And yet several years ago, as we stood at the back of an empty hotel ballroom in New York City, we honestly didn't know how the Carrot idea would be received.

The Public Unveiling

That September night we paced behind the rows of meticulously aligned chairs. We didn't speak to each other although we had a thousand questions in our minds. The next morning would be our inaugural Carrot Culture Summit. We had invited executives from some of the largest and most powerful corporations in the world to attend. We had no idea whether anybody would show up, and even if they did, whether they would be willing to share the positive experiences they'd had with the Carrot books. Our goal was to create an environment of peers at a senior management level, sharing and interacting on subjects of employee recognition. There was the very real possibility that the whole idea was a big mistake. Maybe we should remove a few rows ofchairs, we thought.

The next morning as the Carrot Culture Summit began, the ballroom was packed. As we scurried to find extra chairs, we sensed a buzz in the room, an enthusiasm for these ideas that surprised us. The attendees took their turns addressing the summit with the results they were witnessing in their organizations. The message and tools presented in the Carrot books had struck a resonant cord with them -- a message that was changing the management of these corporations.

Over the past few years we have been pleased to see the attendance at these annual Carrot Culture Summits soar, where hundreds of CEOs, COOs, senior leaders, executives, and vice presidents of organizations share with their peers how recognition has changed their culture and strengthened their managers' ability to lead.

Yet despite the growing popularity of the Carrot movement and the strong results some companies are seeing, we know there are many more companies and managers out there who have not yet adopted the approach. Our biggest frustration is that we continue to encounter managers who think they are too busy to recognize, who think this is a soft business skill that doesn't pay dividends, or who simply don't believe recognition will work with their employees in their unique culture.

Even when presented with the considerable evidence of the improvements in business results that using the Carrot approach brings about -- results presented in detail in this book -- many managers remain hesitant. A recent study we conducted showed that a staggering 74 percent of leaders worldwide still don't practice recognition with their employees.

The reasons respondents gave for their reluctance fell into four categories, with roughly the same number of managers in each group:

- Positives 26 percent. Those who believe in recognizingemployees and do it with or without the company'spermission.

- Fearful 20 percent. Those who instinctively lean towardrecognition but are apprehensive of acting withoutpermission from upper management.

- Controllers 22 percent. Those who might be inclinedto recognize employees but who resist because of theiroverly analytical natures -- nervous of the imprecise aspectsof recognition such as inequity or jealousies.

- Negatives 32 percent. Those who do not believe at allin recognition, many vehemently opposing it on thebasis that it is a waste of time.

The study offered more proof, however, that the managers who do practice recognition get better results. Those who had positive views enjoyed the highest employee trust levels and have the most productive teams, and those with negative views were the most unproductive managers with the smallest number of engaged employees. They also had the lowest trust and communication ratings from their employees.

If this book is for anyone, it is for that 74 percent of managers who still have not embraced the power of recognition. In these pages we address some of the most common questions we've had from business people about whether or not recognition really works, and have included a new chapter on one of the biggest questions: whether it is as effective with employees around the rest of the world as it is in North America. In that chapter we report on the results of a global study we commissioned from global professional services firm Towers Perrin, showing that, yes, the impact of recognition is truly as effective in Europe, Asia, South America, Australia, and the Middle East as it is in America. It's not industry, career-level, or even culturally specific; it works powerfully with any person or group, anywhere on earth.

And, since this book can contain only a portion of what we've learned over the years, we have also created a wealth of material online at carrots.com/resources. These free downloadable items include a white paper that succinctly outlines the business benefits of recognition for senior leaders, audio interviews on how-to recognize from some of the world's most successful CEOs, 52 more day-to-day recognition ideas -- added to the 125 presented in the book -- and a few surprises.

Thriving in Hard Times

In any turbulent time, it is more important than ever for managers to make use of the powerful tool of recognition. It has never been more vital to engage our employees and recognize their efforts, which, as the data we present in this book shows, is the single most powerful means of retaining the best employees and making all of your people as productive as they need to be to grow market share.

If those are your goals, we urge you to read on. We assure you that, as so many others who have read this book and implemented its advice have attested to, The Carrot Principle will produce dramatic results in your organization.

January 2009

Copyright © 2007, 2009 by O.C. Tanner Company

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Excerpted from The Carrot Principle by Adrian Gostick Copyright © 2009 by Adrian Gostick. Excerpted by permission.
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