In an economy struggling to recover and with companies being pinched by inconsistent revenues and ever- increasing costs, business leaders need to look no further than within their workforce to return to higher levels of profitability.
It has been estimated by international research firm Gallup that U.S. companies alone are wasting $300 billion annually in lost productivity due to un-motivated, dis-engaged employees.
Additionally, the Sirota Survey Intelligence organization reported in 2005 that in 85% of Fortune 1000 companies, employee motivation and morale “declined significantly” within the first six months of joining a company, and continued to decline thereafter. And, that was during good economic times, before the economic downturn began in the fourth quarter of 2007.
Imagine what those numbers are like today?
Business leaders can dramatically improve bottom line performance by simply working to solve the problems causing those bottom-line limiting statistics.
As the world moves deeper into the 21st Century and as the younger generation continues to infiltrate the workforce, business leaders are going to have to embrace Douglas McGregor’s 1960s Theory Y approach to managing personnel that he released as management professional at MIT. McGregor’s Theory Y posited that managers view their people as ambitious and self-motivated, that they enjoy their mental and physical duties as work and will seek to grow, learn and look for greater responsibility if given the opportunity. Theory Y suggests that for these reasons employees can and should be engaged in creativity, problem-solving and insights into how to improve their employers operations.
Organizations that embrace a Theory Y approach, and look to create an environment in which those type of employees thrive will turn around the trends identified in the statistics at the beginning of this article, here are some examples of how transformational these efforts can be:
Oil Rigs in the North Sea and off the coast of South America:
There is probably no greater “command and control” type of work culture than on an oil rig in the middle of an ocean. Two failing oil rigs that were losing millions of dollars due to slow productivity and cost overruns were on the verge of being closed down.
As a last resort a process was put in place to ask the frontline workers to help solve some of the productivity, efficiency and cost problems.
At the end of each of the three round-the-clock shifts a brief meeting was held to evaluate the processes applied. In the meeting a simple question was asked, “what could we have done better or differently to make this process work more efficiently.”
Due to a lack of trust build up from the old “command and control” environment, it took a couple meetings before participants felt comfortable sharing critical ideas. But, eventually, after just a few days quality information began to come forth as employees began to see that their managers were truly interested in their contributions to solving the problems. As each shift shared ideas, one shift’s ideas built on the previous shift’s ideas creating an upward spiral of process improvements.
Within just three weeks the oil rig workers, on their own, contributed, implemented and then refined ideas that had generated an 800% improvement in the workflow process. One such workflow process went from an average 8 hours down to an average of just over one-hour.
Independent Insurance Agency
A small insurance agency with eleven employees and approximately $1million in revenue was experiencing significantly low morale among its workforce and suffering with a truly toxic work environment. Co-workers had a tendency to yell at each other in the halls and were holding on to information necessary for effective teamwork and customer service
There was a culture of continual lack of follow through on the part of the company’s leadership on agreed upon initiatives that fell into a black hole never to be heard from again. Employees had developed learned helplessness and defaulted to survival and self-preservation mode creating the toxic work environment all were living and working in.
Instituting a program that included one-on-one interviews, facilitated group discussions, accountability to follow through on agreed upon ideas and initiatives, implementation of job performance expectations and office behavioral standards, and the adoption of a “Team Agreement” the basic office culture was turned around within 90-days.
From that point on additional personal and non-industry professional development trainings were instituted that supported and reinforced the initial triage. The year after the company invested in this initiative revenues increased by 33%.
Many Other Examples
These are just two examples of what can happen when employees become beyond motivated to engaged, enthused and enchanted with the company they work for and the work environment they’ve helped to create.
Here are some others:
- A healthcare system with 16 facilities and 15,000 employees implemented strategies that increased revenue and generating cost savings totaling $19 million.
- A manufacturing company in Southern California eliminated $900,000 in waste from hits operation within 12-months of implementation of similar strategies.
- Another manufacturer in the United Kingdom increase pre-tax profits by 300% over a five-year period.
- On a smaller scale a chimney sweep company with six teams and six vans to service its clients saved between $12-$18,000 within the first 30-days of the company leaders changing their approach to how they were communicating with their employees.
These results show that it is counter productive and ineffective for company leaders to continue to exert a command and control leadership style, while looking for ways to decrease payroll expenses by reducing their workforce.
Instead business leaders should be shifting their approach to one of “engage and enroll” to tap into their company’s most value asset, their human assets on the frontline.
This is one of the most powerful strategies to turn around any company’s financial reality in today’s challenging economy. And, best of all, it is also virtually the only strategy that will not cost a dime to implement.
If you’d like to learn more join me on for a FREE Teleclass on November 17th titled:
“3 Simple Secrets to Increase to Your Bottom Line: How Maximizing Motivation, Trust & Commitment in Your Workplace Makes the Difference in Today’s Challenging Economy!“
Or, if you’d like more specific and direct help to improve your approach to leadership communication to transform motivation, morale and performance in your organization, feel free to schedule a private, one-on-one strategy session. To get your private, one-on-one private, strategy session go here
’til next time, make it a great week!