August 17, 2012
ad
er
The Plain Truth about Employee Engagement
and Your Bottom Line
's
C
op
y
Contented Cows Still
Give Better Milk,
Revised and Expanded
ng
Le
ar
ni
©2012 by Contented Cow Partners, LLC
Adapted by permission of John Wiley & Sons, Inc.
ISBN: 978-1-118-29273-0
Le
Bill Catlette and Richard Hadden
nd
Introduction
C
hi
ca
go
la
Research has shown that when employees are
focused and fully engaged, they are more productive at work. In Contented Cows Still Give Better
Milk, Bill Catlette and Richard Hadden suggest that
employees are more likely to happily work to the best
of their abilities when their employers adopt leadership habits that make the organization a great place
to work. They describe the practices that have helped
top companies hire, cultivate, and retain satisfied
employees that are dedicated to building wealth.
The Premise of Contented Cows and
Common Cows
A common characteristic among high performing
companies is that most are considered great places
to work. Almost all the companies in the top 15 of
Fortune’s Global Most Admired Corporations have
outstanding workplace reputations. Catlette and
Hadden examined company data and found that
publicly traded companies that were good places to
work typically outperformed their peers on a longterm basis.
In the first edition of Contented Cows Give Better
Milk, published in 1998, the authors compared six
companies that were employers of choice and six
competitors with a lesser reputation. They called the
former Contented Cows and the latter Common Cows.
After analyzing their sales growth, earnings, productivity, and return to shareholders between 1986 and
1995, they found that the Contented Cows outgrew,
outearned, and outperformed the Common Cows by
a large margin. After publishing the book, Catlette and
Hadden extended the comparison period to 15 years
and included the 2000 recession. This study revealed
that Contented Cows outgrew their counterparts by
a 10:1 margin, outearned them by $111 billion, gen-
Business Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Contented Cows Still Give Better Milk, Revised and Expanded
Bill Catlette and Richard Hadden
erated 16 times more wealth for shareholders, and
created tens of thousands more sustainable jobs.
Key Concepts
To be a Contented Cow, a company must meet three
criteria:
Contented Cow companies engage in the following activities:
1. Sustainability. The company must have a business
model and track record that suggests they will exist for many years.
1. Hire and retain only people who will be productive and satisfied in the organization.
2. Continuity. The company must have been in business for at least five years.
2. Keep employees focused on the organization’s purpose, while removing distractions
that drain energy.
ad
er
's
C
op
3. Ensure that employees are committed, by
meeting four information needs: (1) what is
the organization all about, (2) where is the
company going and why, (3) how will the
organization attain its goals, and (4) how do
employees fit in.
ni
go
la
nd
Le
ar
Truly outstanding companies differentiate themselves
by hiring and retaining top performers and using
them as a source of competitive advantage. Although
most products and services can be imitated, it is hard
to copy a focused and caring workforce. Successful
companies use two methods to create a workforce
comprised of Contented Cows:
ca
1. They hire and retain only people who will be productive and satisfied in the organization.
C
hi
2. They keep employees focused on the company’s
purpose, while removing distractions that drain
energy.
Companies get the kind of behavior from employees that they expect. For example, companies that
feel employees are untrustworthy will institute procedures that promote this type of behavior. On the
other hand, companies that trust their employees will
deliver and develop employment practices that align
with that assumption. Catlette and Hadden recommend adopting the following rules:
4. Demonstrate that employees are cared about
by focusing on safety, telling employees the
truth, going the extra mile during tough
times, and getting to know employees.
Le
ng
Examples of Contented Cow companies include
Google, Qualcomm, General Mills, J.M. Smucker,
Publix Super Markets, Novo Nordisk, Roche, Chesapeake Energy, NuStar Energy, Marriott, Starbucks,
and The Walt Disney Company. Catlette and Hadden
analyzed data from these companies from 2001 to
2011. They found that their average annual stock
return was 10.7 percent – this was 9.7 percent higher
than the broader market average.
y
3. Desirability. The company must be considered a
good place to work with sensible and affordable
employment policies.
5. Enabling employees is accomplished through
training, systems that remove workplace obstacles, promoting trust between managers
and workers, sharing information, and giving employees discretionary authority.
6. Recognize and develop Type I (Contented
Cow) managers and send Type II (Slow Milkers, Chronic Kickers, or Finicky Eaters) and
Type IV (Low Producing Boss Cows) managers to work elsewhere.
g g g g
Information about the author and subject:
http://contentedcows.com/
Information about this book and other business titles:
http://www.wiley.com/WileyCDA/
Related summaries in the BBS Library:
The Enemy of Engagement
Put an End to Workplace Frustration – and Get
the Most from Your Employees
By Mark Royal and Tom Agnew
1. The Rule of Common Purpose. Organizations should
be run in a way that permits all legitimate stakeBusiness Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Page 2
Contented Cows Still Give Better Milk, Revised and Expanded
Bill Catlette and Richard Hadden
holders to benefit.
2. The Rule of Selective Membership. Winning organizations recognize that membership is a privilege,
rather than a right. Their recruiting processes reinforce that the organization is a great place to work,
but it is not right for everyone.
is done by aligning employees with the organization’s core purpose.
• Employees are Cared about. Companies let workers
know in many different ways they are important.
• They Enable employees. People can do their best
work because obstacles have been removed.
Le
About the Authors
ar
ni
ng
Le
ad
er
's
C
op
y
3. The Rule of Omission. Employees, customers, and owners The notion of Contented Cows is anything but new. We’ve
are more inspired by what known for a long time that people can choose to contribute if
companies do not do, than
(but only if) they want to.
what they do. For example,
organizations should never lie
to people, take them for granted, keep them in the
Contented Cows Are Committed
dark, or humiliate them.
Employees cannot be committed without a well
defined purpose. Unfortunately, most companies do
Additionally, Contented Cow employees desire
not clearly articulate their overall direction, goals,
meaningful work, high standards, a clear sense of
and priorities. The authors identify various common
purpose, internal systems that support their efforts,
problems including: communication that occurs once
a level playing field, and to feel competent. To supa year, goals that change weekly, managers who say
port these goals, Contented Cow companies engage
one thing but do another, and executives who do not
in three activities:
spend enough time ensuring that employees under• They ensure that employees are Committed. This
stand the mission, vision, and value statements.
hi
ca
go
la
nd
Bill Catlette is a thought leader in the arena
of leadership and employee engagement. He
has spent his entire career helping build highly
successful organizations. Catlette coaches and
advises managers worldwide on leadership and
employment matters.
C
Richard Hadden is a Certified Speaking Professional (CSP) with a focus on leadership
and employee engagement. Since 1990, he has
addressed more than 800 audiences on five continents, making the business case for having a
focused, engaged, and capably led workforce.
Catlette and Hadden are coauthors of Rebooting
Leadership and the Contented Cows leadership
book series.
Committed Cow companies help employees see where
the organization is headed, what goals they are most
concerned with reaching, and what role they will play
in reaching that goal. Catlette and Hadden emphasize
that there is no middle ground when it comes to commitment – employees either are committed or they are
not. Leaders must strive to get employees to buy into
the company’s journey.
To achieve high levels of employee commitment,
organizations must meet four information needs:
1. What is the organization all about? Workers must
clearly know what the company stands for and believes in. This includes the types of activities that
employees must engage in to succeed and get promoted. For example, Johnson & Johnson has done
this well through the J&J Credo, a 308 word document that articulates what the company stands for.
J&J’s former CEO spent up to 40 percent of his time
explaining the Credo.
2. Where is the company going and why? Leaders must
establish, communicate, and illuminate the organization’s path for workers. All activities from front-
Business Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Page 3
Contented Cows Still Give Better Milk, Revised and Expanded
line workers’ actions to budgets and reward mechanisms should support the company’s purpose.
The company direction must be conveyed simply,
graphically, and credibly.
3. How will the organization attain its goals? Clarifying
the first two to three steps that will be needed to
make progress toward the ultimate destination
is helpful. NFL coaches, for example, use “play
scripting” to describe the first 10 to 12 offensive
plays the team will use in the next day’s game.
Bill Catlette and Richard Hadden
about safety standards.
A common myth that many companies believe is
that caring about employees means providing high
salaries and expensive benefits that the market does
not require. In reality, companies often use these to
compensate for serious problems throughout the
organization. Money cannot buy a high performance
organization.
The Importance of Telling the Truth
Companies that care about employees tell the truth
even when it is unpleasant. The breaches of trust that
occurred during the global financial crisis and the
great recession in the late 2000s have created mistrust
among employees. They are hesiContented Cow companies unabashedly take steps to ensure tant to trust leaders at any level.
that people who won’t fit in with their particular environment This is unfortunate because trust
don’t go to work there (and that they don’t last long if they do accelerates work processes. When
it is absent, it creates a drag on
somehow manage to get on the payroll).
performance. Employees do not
expect leaders to be perfect all the
Contented Cows Are Cared About
time and they will forgive many mistakes. However,
Caring is an attitude that is reflected by personal and
they are unlikely to pardon company leaders for disorganizational priorities. It is not a program or a techhonesty.
nique. For example, when Gerald Grinstein served as
Another aspect to honesty relates to performance
Delta Airlines’ CEO from 2004 to 2007, he led the comevaluations. Top ratings should only be given for outpany through bankruptcy and took a self-imposed
standing performance. Managers do not tell the truth
25 percent pay cut. When the company exited bankwhen they give every employee a top rating. To make
ruptcy protection, he declined the post bankruptcy
telling the truth less painful, leaders should always
bonus and put the $10 million in a fund for employstrive to convey information sooner rather than later.
ees, families, and retirees to use for scholarships and
If they are responsible for a problem, they should
emergency hardship assistance.
own it. However, if they are not responsible, they
Another compelling example is Plantronics Mexico.
should be clear about that as well. Leaders should
When Alejandro Bustamente took over as president
make it easier for employees to tell the truth as well,
in the mid-1990s, he tried to institute a culture where
even when it is bad news. This means rewarding the
everyone was treated with respect. He had business
messenger, rather than shooting him or her.
cards printed for every single employee. This was a
When Times Get Tough
huge win for employee morale and it also attracted
Many organizations show how much they care about
new talent to the company.
employees by being physically present when workIn addition, workplace safety is an essential part of
ers or communities experience tough times. Marriott
caring for employees. Alaska Clean Seas holds safety
International, for example, routinely pulls out all the
meetings once a week. The greatest safety champion
stops during times of need. After Hurricane Katrina,
in the company is the president and general manager,
the company provided financial assistance and housRon Morris. In ten years, the company has not had a
ing to affected employees. Similarly Hanmer MSL,
single lost time accident. Leaders must model safety
a PR and social media marketing company in India,
in all they do, keep their mind open to safety-related
made sure all employees were safe after the July 2011
suggestions from employees, and be unambiguous
C
hi
ca
go
la
nd
Le
ar
ni
ng
Le
ad
er
's
C
op
y
4. How do employees fit in? Workers must know the role
they need to play and what is expected of them.
High expectations promote high performance.
Business Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Page 4
Contented Cows Still Give Better Milk, Revised and Expanded
Some companies have developed programs to keep
employee communications and corporate affinity
strong. Incepture includes its more than 700 contractors in quarterly leadership meetings, company social
events, and more. Developing long-term relationships with contractors allows Incepture to attract top
performers. Northern California supermarket chain,
Nugget Market, holds employee rallies every day and
uses an in-house TV network to discuss the value of
service. Bombardier Aerospace, on the other hand,
implemented “listening cafes” where senior leaders
do little talking but lots of listening.
y
In the workplace, employees never forget real or
perceived injustices such as favoritism, unfair evaluations, lack of training, etc. Once these reach a breaking
point, workers will escalate their demands for justice.
To address these issues before they become problematic, Contented Cow organizations proactively
implement systems that encourage problem resolution.
before making a commitment. Once an individual is
hired, the best companies engage in “re-recruiting”
which starts with onboarding and extends through
the employee’s life with the organization. Consolidated Health Services (CHS), for example, started
an Ambassador Program which pairs every new hire
with an experienced employee. The Ambassador
guides the new hire through their first 120 days on
the job.
op
bombings in Mumbai. The company also leveraged
email and social media to overcome communication
bottlenecks – they reached out to employees in other
cities who could call Mumbai employees’ families
with updates.
Bill Catlette and Richard Hadden
la
nd
Le
ar
ni
ng
Le
ad
er
's
C
During the great recession, many companies engaged
in layoffs – some were necessary for survival, while
others were viewed as a way to eliminate unwanted
employees without suffering reputational damage.
To avoid layoffs entirely, Catlette and Hadden recommend focusing more on the quality of new employees
than the number of new employees. Additionally,
companies should adopt very
high performance expectations, People need to hear bad news directly from the person who made
continually raise the bar, and the decision, rather than read it in a report, in an e-mail, on
regularly remove employees
Facebook, or in a tweet. And they deserve to hear it as early as
who cannot measure up. Creative
ways to prevent layoffs include possible.
shortened workweeks, job reassignments, and bringing outsourced functions back
Connecting With Employees
in-house.
go
Contented Cows Are Connected
C
hi
ca
Contented Cow company leaders invest in their people
by spending time with employees and getting to
know them. These relationships help managers determine how engaged their teams are. Unfortunately,
work groups can become so large that leaders can no
longer connect effectively with employees. The Container Store addressed this problem by adding three
to five managers per store to nurture, develop, and
train employees. Although this approach increased
store payroll, the company’s already low turnover
has decreased, productivity is higher, and payroll as a
percentage of sales has declined.
Contented Cow organizations also try to connect with
potential employees before they are hired, allowing
them to get a sense of the organization and connect
through Benefits
Catlette and Hadden suggest that the best employee
benefits meet four criteria: (1) they help companies
compete for the best talent, (2) they make employees
more productive, (3) they advance the organization’s
mission and values, and (4) they are practical and cost
effective.
In the United States, health care benefits are a significant issue for both employees and employers. The
authors recommend that companies become more
knowledgeable about the economics of healthcare
delivery, avoid basing decisions related to health
care benefits on short-term factors, and join with
other employers to shape the debate and solutions.
Many options exist for addressing employee health
care needs without paying for all or part of their
insurance premiums. Some companies, for example,
Business Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Page 5
Contented Cows Still Give Better Milk, Revised and Expanded
have insourced employee and dependent healthcare,
installing full medical clinics on-site.
Flexible schedules and telecommuting can be a great
way to improve employees’ quality of life. Organizations must address concerns, however. Some
managers fear that employees will not be as productive when working from home. On the other hand,
some employees will work too much at home, damaging relationships outside of work. In the area of child
care, companies with less formal work environments
are permitting employees to bring infants up to six
months old to work.
Bill Catlette and Richard Hadden
jectory for these managers is onward and upward.
• Type II: Slow Milkers, Chronic Kickers, or Finicky Eaters. These managers do not meet commitments,
share the company values, or last long in the organization.
• Type III: Fence Breaking Explorers. These managers
believe in the values, but sometimes miss commitments. Usually, they are given another chance to
prove themselves.
C
Le
ad
er
In many companies, the efforts of
good leaders can be overshadowed
by one or two Type IV managers. Type IV managers
create damage in their own departments, as well as
elsewhere in the organization when people see that
bad behavior is tolerated. Every Contented Cow company studied by Catlette and Hadden works hard to
recognize and develop the Type I managers and to
send the Type II and IV managers to work elsewhere.
nd
Le
ar
ni
ng
Many progressive organizations have eliminated
separate banks for vacation, sick, and personal time
off. Some have created one bank of time that can be
used in any way that employees wish, while others
like Netflix have eliminated time off policies entirely.
They rely on employees to act like adults when using
sick and vacation time. In general, the best way for
organizations to provide the best benefits is to ask
employees for their input about what they want and
need.
's
Trust, integrity, call it what you
customer, supplier, or employee, it
differentiates the Contented Cows from the also-rans.
op
y
• Type IV: Low Producing Boss Cows. These managers
are the most difficult. They deliver short term results, but without regard to values.
will, but whether it’s as a They erode organizational values
by squeezing people and grinding
is one of the key factors that them down.
la
Contented Cows Are Enabled
C
hi
ca
go
Many leaders try to “empower” their employees, but
their efforts are often not productive. The best way
to empower workers is to equip them to do their jobs
and then make sure the organization stays out of the
way.
During Jack Welch’s tenure at General Electric, the
company used the “Four Types of Managers” model
to describe the full range of leaders in the organization. Catlette and Hadden have found that this matrix
applies to nearly every organization. This matrix
allowed GE to align leadership styles and practices
more closely with the company values. The authors
have adapted the model to conform to Contented
Cow terms:
• Type I: Contented Cows. These managers deliver on
performance commitments. They also believe in
and strive to further the company values. The tra-
The Importance of Training
A study by the American Society for Training and
Development found that American organizations
provided an average of 32 hours of training per year
per employee in 2010. Contented Cow companies,
however, tend to invest much more. Although training can be expensive, not investing in it can lead to
costly rework, lost customers, and additional supervisors. A more debilitating cost is employees who do
not feel confident in their abilities to do their work.
Contented Cow companies offer many different
types of training and treat employee orientations as
an opportunity to train new hires about the company
values. Training is not just for employees. Managers must participate in training and demonstrate the
skills they expect their teams to learn. Key training
related questions include the following:
• Have minimum proficiency standards been established for job skills training?
• How must trainees demonstrate proficiency, both
Business Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Page 6
Contented Cows Still Give Better Milk, Revised and Expanded
on an initial and recurring basis?
Bill Catlette and Richard Hadden
some spending decisions.
• What follow up measures ensure that people have
learned something during training and will use it?
• Who pays for training? Training that is funded
from department budgets is taken more seriously
than courses funded through the training department.
• What are the organization’s training priorities?
Most organizations do not know.
Companies must recognize that just as they have
choices, so do their employees. Refusing to provide
people with the information and tools needed to do
their best work will lead to trouble hiring and retaining top talent. Contented Cow organizations go to
great lengths to engage their employees and to make
them feel like owners. Catlette and Hadden believe
that it is a strong recipe for success.
Equipping Employees with Tools
g
g
g
y
g
op
Features of the Book
C
Reading Time: 4.5 hours, 208 pages
Le
ad
er
's
Bill Catlette and Richard Hadden’s research shows
that when companies are committed to their employees and focused on employee satisfaction, they are
able to outperform their competitors on financial and
other business measures. Contented Cows Still Give
Better Milk describes techniques that organizations
can use to generate commitment among workers,
demonstrate that they care about employees, and
enable the workforce to do their best work possible.
Each chapter builds on the next, so the book is best
read in sequential order. At the end of the book, the
authors have provided notes and an index for reference. Contented Cows Still Give Better Milk would
be of interest to managers at any level who would like
to enhance employee engagement and improve team
productivity.
ng
A company’s policies, systems, and procedures can
have either a positive or negative effect on employees. Catlette and Hadden have found that Contented
Cow companies invest considerable time and effort in
designing systems that make heroes out of employees. This tooling process rids organizations of success
inhibitors that prevent employees from doing things
right. Examples include practices that frustrate personal effort, systems that reward people for doing the
wrong things, and communication methods that are
ineffective.
go
Enabling Employees
la
nd
Le
ar
ni
Processes can make the difference between a satisfied
employee focused on customer satisfaction and a frustrated one who is unconcerned with customer needs.
LaRosa’s Pizzeria, for instance, uses lean manufacturing processes to improve customer and employee
experiences, while saving money and increasing margins.
C
hi
ca
Trust differentiates Contented Cow organizations
from their lower performing peers. Employees base
trust on the relationship they have with their manager, as well as on the policies implemented by the
company. Practices that convey a lack of trust include
probation periods, time clocks, and locked supply
cabinets.
One way to measure the amount of trust an organization has in its employees is by the amount and type
of information that is shared with workers. Another
indicator is the amount of discretionary authority that
is given to employees. Catlette and Hadden recommend putting employees in charge of hiring decisions,
involving them in promotion decisions, and requiring
them to be personally involved and responsible for
Contents
Acknowledgments
Introduction
PART I: The Premise
Chapter 1 Just the Facts
Chapter 2 Cows with Attitude
PART II: Contented Cows Are Committed
Chapter 3 The “Vision Thing”: Passengers or Crew
Chapter 4 The Path to Commitment
PART III: Contented Cows Are Cared About
Chapter 5 First You Feed the Troops
Business Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Page 7
Contented Cows Still Give Better Milk, Revised and Expanded
Bill Catlette and Richard Hadden
Chapter 6 Tell ‘Em the Truth
Chapter 7 When Times Get Tough
Chapter 8 Contented Cows Are Connected
Chapter 9 A Case for Some Useful Benefits
PART IV: Contented Cows Are Enabled
Chapter 10 Empower This!
Chapter 11 Enabled Employees Are Incredibly Well
Trained
op
y
Chapter 12 Enabled Employees Are Tooled
Chapter 13 Enabled Employees Are Trusted
's
C
Chapter 14 When the Contented Cows Come Home
(Speculations on the Near Future)
er
Notes
C
hi
ca
go
la
nd
Le
ar
ni
ng
Le
ad
Index
Business Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Page 8
Bill Catlette and Richard Hadden
nd
Le
ar
ni
ng
Le
ad
er
's
C
op
y
Contented Cows Still Give Better Milk, Revised and Expanded
A Note to Our Readers
C
hi
ca
go
la
We at BBS encourage our readers to purchase the business books we summarize.
BBS Summaries are intended as a service to busy professionals, as we recommend only those books
that are worth your time to read in their entirety. We apply stringent criteria in selecting only the best
business books, and in that selection process, strive to help you make informed book-purchasing decisions.
Click to Buy This Book
This book is available at bookstores and online booksellers.
Business Book Summaries® is a service of EBSCO Publishing, Inc.
For more information about BBS, to subscribe to BBS,
or to provide us feedback, visit our Web site.
www.ebscohost.com
EBSCO Publishing Inc.
10 Estes Street
Ipswich, MA 01938 USA
Copyright of Business Book Summaries, Business Book Review, BusinessSummaries and BizSum is property of EBSCO Publishing
Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s
express written permission. However, users may print, download or email articles for individual use.
Business Book Summaries® August 17, 2012 • Copyright © 2012 EBSCO Publishing Inc. • All Rights Reserved
Page 9
C
hi
ca
go
la
nd
Le
ar
ni
ng
Le
ad
er
's
C
op
y
Copyright of Contented Cows Still Give Better Milk is the property of Great Neck Publishing and its content
may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express
written permission. However, users may print, download, or email articles for individual use.