What Managers Can Learn From Undercover Boss

by Cindy Byrd

Managers who strive for harmony between concern for results and concern for employees are more likely to inspire engagement.

“I’m just straight-up lazy. I know how to grow some weed if you’re interested.” Although this could have been said by “surfer dude” Spicoli in the 1982 movie Fast Times at Ridgemont High, it was actually spoken by an employee to Toby Bost, CEO of O’Neill Clothing USA, a prominent surf wear and active lifestyle brand. What was he thinking… or smoking? In all “fairness,” the employee had no clue he was discussing his hobby with the CEO, because Bost was disguised for the Emmy-winning TV series Undercover Boss.

Like Bost, perhaps you would be thinking, “This is unacceptable! I’ve caught him doing something wrong, and he needs to go!” Indeed, employees have been fired in other episodes; but if firings were the only appeal, people would be watching The Apprentice.

Instead, “catching people doing something right” is the message of Undercover Boss. It’s a concept originated by Ken Blanchard in his book The One Minute Manager, which also premiered in 1982. Just as coming-of-age movies have evolved, so have management approaches—most in the last decade have aimed at increasing employee engagement. Yet a 2011 study by the Society for Human Resource Management reports that all surveys, from Gallup to Towers Watson, consistently indicate that only a small minority of employees feel fully engaged. With so much emphasis on improving engagement, why such dismal results? What can managers do differently?

Undercover Boss illustrates Blanchard’s simple concept of catching people doing something right, as well as demonstrating six strategies to improve engagement:

  1. Experience firsthand what employees deal with on the job
  2. Spend time getting to know employees
  3. Invite employees to share feedback and ideas
  4. Show employees they are valued and appreciated
  5. Nurture employee talents and dreams
  6. Reveal your true/authentic self.

Perhaps these strategies seem obvious, or like “old” approaches that have been tried before. However, the most powerful takeaways are the underlying lessons learned while employing these strategies.

Strategy #1: Experience Firsthand What Employees Deal With On the Job
Sam Taylor, CEO of Oriental Trading Company, went undercover to ensure front-line employees were staying true to the company mission of selling fun. He learned, however, that they were experiencing anything but fun. The first employee he encountered described OTC as “a godforsaken, grueling place to work” and said half the employees didn’t care about OTC because managers don’t know how to interact with employees and treat them as numbers.

Taylor also learned that cost-cutting measures that eliminated sports drinks and water caused negative consequences on the front lines. An employee loading boxes into a truck said, “We claim to sell fun, but it’s no fun in this truck. It’s very hot, and we work too long for no money.” Kim, a warehouse employee told Taylor, “It’s hot inside here. They don’t provide water—it’s a budget thing. Why don’t those bigwigs come in here and see what it’s like? Company picnics are nice, but take care of us on the job instead.”

The undercover bosses also learn the challenges and skills required to carry out job responsibilities. When Bost went undercover to learn screen printing, he discovered that design specifications were missing. This meant Jorge, the screen printer, had to “eyeball” placement, a process he realized wasn’t easy when he screened shirts with crooked lettering. At an O’Neill’s retail store, Bost learned the assistant manager, Desiree, had no company guidelines for merchandising. While working with another employee, Michael, Bost experienced an outdated computer system and a tedious inventory process.

The underlying lesson from Strategy #1: The focus should be on fixing problems, not people. Taylor put it this way: “It’s easy to criticize from afar, or think everything is okay. You have to experience things firsthand to really be aware.” Managers must be mindful of issues that undermine employee effectiveness, such as inefficient processes, incomplete communication, an outdated system, or lack of adequate resources and support. Employees will be relieved to have action taken on longstanding issues and will feel more valued and supported.

Strategy #2: Spend Time Getting to Know Employees
Along with learning their jobs, the undercover bosses also take time to learn about the employees themselves. They are surprised and inspired by their stories—even the “surfer dude.” Obviously, this employee had taken O’Neill’s unstructured culture to the extreme, but Bost decided to learn more before acting on his instinct to fire him. What he uncovered was that the employee came from a broken family and lacked fatherly guidance and support. While no excuse for inappropriate behavior at work, it gave Bost greater insight and understanding.

Bost also learned about other employees’ circumstances. One of Jorge’s six children had a rare disease that caused emotional and financial hardships to the family. Michael’s family had been homeless, and he had been robbed at gunpoint. His mom was out of work, so he was supporting her and two siblings. Desiree was going through a divorce and raising a young daughter.

Often, these undercover bosses discover how much employees care about the company and its customers. Michael’s positive attitude encouraged coworkers to act as a team. Desiree instituted creative contests to boost sales. Jorge taught himself to make the shirts turn out right without design specs. Kim was willing to forego a larger productivity bonus to ensure boxes were always neatly packed and “not sloppy” for OTC customers.

The underlying lesson from Strategy #2: Getting to know employees creates a more complete picture and reduces inaccurate assumptions about behavior and motivation. It would be easy to assume that Kim didn’t earn her full bonus because she was lazy, when in fact, she was more motivated by ensuring orders were neatly packed. Such judgments may also cause managers to overlook what Bost calls “diamonds in the rough”—employees with undiscovered or untapped potential.

Strategy #3: Invite Employees to Share Feedback and Ideas
Jim Rogers, CEO of Kampgrounds of America (KOA), said the person doing the job knows what it entails better than managers, so ask for input and feedback. But not all undercover bosses are prepared for what they hear. Obviously, because employees don’t know they’re talking to “the boss,” they are more likely to be open and frank. Taylor asked an employee what advice he would give OTC and got this response: “Be different than us! Treat people like they care about them.” Taylor said it was frustrating to hear complaints and learn that employees wouldn’t recommend OTC as a good place to work.

In The One Minute Manager, Blanchard suggests that managers ask for solutions; otherwise, they may get only complaints. The undercover bosses seek employee ideas and use them to inspire organizational change, revamp processes, create new products and even generate new customers. A product sorter at OTC suggested developing products for the growing Hispanic market. Desiree’s creative approaches for motivating sales staff inspired Bost to establish a new bonus program for the entire retail team at O’Neill, and his experience with Michael resulted in a new computer system and a $50,000 crisis fund for employees in need.

The underlying lesson from Strategy #3: While it may be difficult to hear criticism, managers may miss valuable information and ideas if they don’t encourage candid input and feedback. Short of going undercover, managers must build trusting and open relationships so that employees are willing to share and are not fearful of retaliation or repercussions. Managers should collaborate with employees to develop, rather than impose, solutions.

Strategy #4: Show Employees They Are Valued and Appreciated
Catching people doing something right creates prime opportunities to show appreciation. The undercover bosses remark about employees’ unique abilities, whether it’s working a busy drive-thru window, operating a sorter that handles 450,000 items a day, or handling an irate customer.

In The One Minute Manager, Blanchard says people who feel good about themselves produce good results. But when Taylor heard the suggestion about products for the Hispanic market, he also learned this employee never received a response to her idea. She wasn’t necessarily expecting her suggestion to be implemented; however, she did expect to hear from “higher up.” As Paul Damico, CEO of Moe’s Southwest Grill, said, “Hard work and dedication all too often go unrecognized.” Perhaps submitting a suggestion isn’t exactly hard work, but it does show dedication to company improvement. Yet without acknowledgement, she again feels like a number, which only diminishes her enthusiasm and dedication.

One popular aspect of Undercover Boss occurs at the end of each episode, when employee efforts are recognized with bonuses, family vacations, college tuition or assistance to ease financial burdens. Employees are overwhelmed by this generosity, and the bosses learn what really matters most. At O’Neill Clothing, employees can bring their dogs to work, visit an on-site skate park and gym, and enjoy a laidback environment. But Bost learned it means more for employees to personally know they are valued and appreciated.

The underlying lesson from Strategy #4: Managers don’t need a big pot of money or benefits to show employees they are valued and appreciated. Jim Rogers says that a simple “thank you” is one of the most important actions. These “little things” may be everything, because employees often perceive their value through the supervisor’s lens. Employees don’t learn until the end that the praise and appreciation are coming from “the boss,” which always adds more meaning. So skip the “one-size-fits all” approach; employees feel more confidence and commitment when their efforts are personally recognized.

Strategy #5: Nurture Employee Talents and Dreams
Additionally, the undercover bosses identify untapped employee potential and provide development opportunities. Damico witnessed Angelisa, a seasoned manager, exceeding company standards by sharing creative ideas for a dessert menu. He sent her to company headquarters to meet with their executive chef about her ideas. Damico was also impressed with the marketing knowledge and customer skills of Janet, a catering director. Because Damico wanted to expand the catering side of Moe’s, he sent Janet to work with the director of catering to develop a worldwide symposium for its caterers.

Bost even recognized potential in his pot-pushing employee, deciding to mentor him and provide the fatherly advice he was lacking. There was good news, too, for the employee whose suggestion went unacknowledged. Taylor invited her to work directly with the product development team and pursue her ideas for the Hispanic market.

Undercover bosses also learn about employees’ dreams—to go to college, advance with the company, start their own business, spend time with loved ones, or simply provide for their families. That was the case for Damon, a line worker at Moe’s, who lacked reliable transportation and struggled to pay for childcare. Damico was impressed with Damon’s dedication to the company and to his daughter, so he provided funding toward a car, childcare and his daughter’s future college education.

The underlying lessons from Strategy #5: Employee potential may show up in unexpected places, even in the form of an employee about to be dismissed. Matthew Kelly, author of The Dream Manager, states that people stop dreaming when they get caught up in surviving. Managers can help employees fulfill their dreams not with money or cars, but with accountability, tools to overcome barriers, encouragement or even a second chance. Employees will deeply appreciate that someone took notice of their potential and interest in their future.

Strategy #6: Reveal Your True/Authentic Self
At the end of each episode, when the undercover bosses reveal their identities, the reactions range from shock and surprise to “Does this mean I’m fired?” Interestingly, the employees don’t seem upset to learn that the bosses falsely represented themselves; ironically, the process of going undercover increases their authenticity.

This authenticity often develops from a humbling undercover experience. In their own inabilities to do their employees’ jobs, the bosses see how much value they contribute. Taylor was humbled by the overall experience, realizing “the personal touch matters.” He saw the need to invest in employees, admitting it was a bad decision to eliminate sports drinks and water. The ability to empathize also increases authenticity. Seeing something in employees and their struggles reminds them of their own lives and how they got to where they are today—a primary reason why Bost offered a second chance, rather than a pink slip, because he saw a younger version of himself needing more guidance and direction. When Damico’s family had only two hours to transport his brother from Long Island to Pittsburgh for a liver transplant, his father’s employer stepped in to help. This experience made a deep impression, and Damico wanted to “pay it forward” for his own employees.

Moreover, the undercover bosses also demonstrate how they genuinely feel. Often, they are moved to tears by the struggles of employees or their reactions when they are shown appreciation. The employees leave with little doubt that someone cares about them and wants them to succeed.

The underlying lessons from Strategy #6: Employees trust managers who are genuine and authentic. Authenticity means being humble and willing to admit mistakes. As Kat Cole, president of Cinnabon stated, “Just because you’re the CEO doesn’t mean you know everything. Be humble enough to ask for help.” Showing emotion is not a sign of weakness. Being self-absorbed is the real weakness that undermines trusting relationships and employee engagement.

The Reality Check
A long-standing reality, backed by Gallup research, is that employees join good companies but leave poor managers who are often unskilled, immature or self-absorbed. While these six strategies can make a difference, managers at all levels must conduct their own reality checks, just like the undercover bosses who realized they had grown out of touch and disconnected.

Unfortunately, many managers are disconnected because they have been conditioned to focus only on results. Metrics, benchmarking and programs like Six Sigma have indeed improved task excellence and quality. However, task excellence will ultimately be undermined without establishing and maintaining quality employee relationships. Bottom-line gain may come at the expense of morale and productivity. Remember the elimination of sports drinks and water at Oriental Trading?

An overemphasis on results often creates unrealistic expectations, conflicting goals and stressed-out managers who may rely on inappropriate practices in order to meet requirements. They are left trying to balance concern for employees with concern for results. Matthew Kelly, though, said it well in The Dream Manager: “If a manager attempts to advance the company’s purpose to the detriment of the employee’s purpose, it will hurt both employee and company. On the other hand, advancing the employee’s purpose at the detriment of the company will hurt both. The two must find a way to co-exist in support of each other.”

Concern for results and concern for employees must live in harmony, rather than balance, and managers are the orchestrators of that harmony. As Undercover Boss demonstrates, it starts with catching people doing something right, and it starts at the top. iBi

Cindy Byrd is owner and CEO of image potential and Labyrinth Leadership, and professor of business administration at Robert Morris University in Peoria.


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