Executive Times






2007 Book Reviews


The Carrot Principle: How the Best Managers Use Recognition to Engage Their Employees, Retain Talent, and Drive Performance by Adrian Gostick and Chester Elton








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I was prepared to dislike what I read in The Carrot Principle: How the Best Managers Use Recognition to Engage Their Employees, Retain Talent, and Drive Performance by Adrian Gostick and Chester Elton. I expected some anemic advice based on personal experience. Instead, I found a research based study, proving the case the authors make for what works when it comes to providing effective recognition at work. Any executive responsible for others in the workplace will find useful and practical ideas on the pages of The Carrot Principle. Here’s an excerpt, from the end of Chapter 7, “The Building Blocks of a Carrot Culture,” pp. 97-101:


The Value of Culture

If your firm were a computer, your corporate culture would be akin to the operating system, guiding how team members think, feel, and act on the job. If your organization were a living, breathing person, your culture would be your personality and very soul. It runs that deep. In fact, culture colors everything we do. Culture is how you do things: the rules, spoken or unspo­ken, that you play by. Culture is the foundation of everything you embrace, and the reason for everything you do.

For employees and managers alike, understanding the com­pany culture helps us make tough decisions instinctively, with­out having to refer to policy manuals. In the best organizations, culture promotes collaboration and links diverse individuals throughout offices. Culture also can enhance respect between coworkers and clients. At the most basic level, it tells customers what to expect from us. Of course, culture also affects our abil­ity as managers to attract better talent.

We’ve discovered that the more that organizations help indi­viduals understand and fit in with the culture, the greater suc­cess the firm and its employees will experience. It’s a bit like creating a giant mosaic, made up of thousands of individual Pieces. In a corporation, something extraordinary happens when all the individual pieces combine to reflect the same company culture. The effect is absolutely awe inspiring.

It is not possible to achieve sustained, long-term success without a strong, positive corporate culture, which is what makes the culture clash that accompanies so many corporate mergers and acquisitions such a dilemma for leaders. In fact, the reason most mergers fail is culture clash and people issues, and yet, most senior leadership teams have little idea how to address this issue. In most cases during a merger, they either outsource the culture dilemma to consultants or ask human resources to figure it out while the rest of the senior leadership team focuses on perceived “important” pecuniary issues. Is it any wonder that more than two out of three mergers fail to deliver antici­pated results?

DHL experienced challenges in blending cultures when it began acquiring various companies in the United States. Said Perry Belcastro, vice president of operations, “When you look at DHL over the years, we’ve had a reputation of going that extra mile for customers. That’s always been our foundation. When we started to buy companies, we got a bit distracted at first from our core values. . . . Under the leadership of John Mullen [CEO of DHL Americas], we stepped back and said, ‘What are the grassroots of DHL?’ It’s differentiating our brand through customer service. It’s that courier going the extra step to satisfy a customer’s needs.”

DHL’s Carrot Culture revolves around customer service. Others turn on innovation and research, while for still others, the crucial factors are zero defects and never-miss delivery.

At KPMG, building a culture that recognizes and rewards outstanding performance is always top of mind. Said Joe Maio­rano, the executive director of human resources, “Whatever you read about supportive cultures says you need commitment from the top. We have commitment from our chairman and CEO to be a great place for all of our people to build a career and work. Recognition is a component of being an employer of choice, and leaders are accountable to recognize their individuals’ and teams’ performance.”

We’ve found that great cultures are built best by frequent, specific, and timely team recognition celebrations and individual recognition. They are places where the recognition doesn’t just trickle along; it flows. At KPMG, for instance, 60 percent of employees received an award of value in a twelve-month period we examined, and many of those employees received multiple awards. In fact, with 19,000 eligible employees in the United States, the firm distributed 36,000 awards—90 percent of which were of the above-and-beyond variety. That means 11,400 KPMG employees received an award of value, and on average those great performers received three tangible awards during the year. That’s a lot of recognition for those top achievers. But it’s necessary for one big reason: great managers realize that their best performers are not only the most courted by outside firms, but are also often, ironically, the most insecure people in the or­ganization.

That point bears repeating. In many cases, it’s insecurity that drives many high achievers to perform so well and so con­sistently. Great cultures are sensitive to our needy natures, and they celebrate a lot—not only individual achievement but team successes too. For example, they celebrate corporate mile­stones: perhaps joining the New York Stock Exchange, open­ing the first office in Asia, reaching thirty years in business, forming a new alliance or partnership, introducing ecosensi­tive environmental standards, reaching a sales goal, launching a new product, and so on. Leaders in effective cultures realize events occur at least every year that are cause for commemora­tion, and they know that no organization can possibly cele­brate too much.

“We often ask audiences if they think their companies cele­brate success enough, and typically no more than 10 percent of the crowd says yes,” said business gurus Jack and Suzy Welch. “What a lost opportunity. Celebrating victories along the way is an amazingly effective way to keep people engaged on the whole journey. And we’re not talking about celebrating just the big Wins.”

What’s most interesting is what happens to the psyche of people in celebrating cultures. They start to believe that they are part of a company of champions, and that generates pride. Em­ployees can’t help but think, “We are always celebrating. So we must be winning.” And that means that even when employees find themselves behind in a goal, they seem to band together to find a way to pull out a victory.

Authors Deal and Key explain the value of frequent celebra­tions within a corporate culture this way, “They bond people together and connect us to shared values. . . . When everything is going well, ritual occasions allow us to revel in our glory. When times are tough, ceremonies draw us together, kindling hope and faith that better times lie ahead.”

Unfortunately, the inverse is true in organizations where ex­cellence is expected, not rewarded, and tough times are dealt with harshly. Not only are these organizations no fun to work in, they fail to drive long-term outstanding results.

Building a culture that celebrates is a key responsibility of a leader. When celebrations stop, we’ve found achievement slows to a trickle.



The Building Blocks of Recognition

Great organizations and effective managers create a Carrot Cul­ture one person at a time by using a variety of inclusive and meaningful recognition experiences. Fortunately, you don’t have to reinvent the wheel every time you recognize. Here are four of the most common forms of recognition that make up the back­bone of a healthy recognition culture:


·        Day-to-day recognition. These are the pats on the back, the handwritten notes, the team lunches, on-the-­spot award certificates, the gifts of thanks, and other ways you regularly praise and express gratitude to em­ployees. This is often low-cost but always high-touch recognition.

·        Above-and-beyond recognition. When your people go above and beyond, they deserve a more formal response from the organization. These awards pro­vide a structured way to reward significant achieve­ments that support the company’s core values and business goals—whether the achievement of a sales goal, the implementation of an innovative idea, or providing exceptional customer service, for exam­ple.

·        Career recognition. Most organizations provide a for­mal program to recognize people on the anniversary of their hiring date, giving managers a prime opportunity to highlight cumulative contributions. In most organi­zations, this is the most underused vehicle for reward­ing and engaging employees.

·        Celebration events. These celebrations reinforce your brand and thank everyone in a team, division, or an entire organization. Events to celebrate include the successful completion of a key project, achievement of record results, company anniversaries, or new product launches.


These four recognition types are the essential tools of a Car­rot Culture, and it’s vital to know how to use them. Ongoing training will help managers understand the why of recognition and learn the details of how.

Let’s start by examining the basic recognition tools and how a blend of informal and formal recognition provides nu­merous opportunities for managers to recognize and engage their people.


The Carrot Principle is packed with ideas for recognition. Whether you do a little or a lot of recognition in your workplace, you’ll come away from this book with loads of ideas on all the possible ways in which you can improve the effectiveness of recognition at work.


Steve Hopkins, May 25, 2007



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The recommendation rating for this book appeared

 in the June 2007 issue of Executive Times


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