How often do you think about ways to better or improve your business? For many business owners and executives, this question is normally at the forefront of their minds. Yet, the answer to this question is rather elusive and very fluid, especially in our current world economy. With rising costs combined with workforce issues, the task of improving our organizations is perhaps more challenging now than any other time throughout our history.
Part of the difficulty in this process is in determining how “improvement” in our company is to be measured. For some, the key metric may be witnessing a reduction in customer complaints and an increase in customer satisfaction. For others, it may be an increase in employee retention. At times, it may be an increase in sales, products made, or services delivered. Perhaps the most universal metric for gauging business improvement is company profits where stagnant or declining profits are indicative of deterioration and increasing profits are signs of the company going in the “right” direction.
This has created situations where owners and executives are starting to lead by budgets and/or profit and loss statements. As long as the numbers look good, they must be a great leader! This is a deceptive mindset to have and is one that often leads organizations to eventual ruin.
How To Achieve Long-Lasting Improvement
As I was reading the Wall Street Journal the other day, I couldn’t help but be drawn to an article entitled “Bosses are finding ways to pay workers less”. I have no doubt that the “bosses” discussed in the article operate under a leadership by budget or profit and loss mindset. This strategy will work at least temporarily but will also cause terrible long-term consequences. I have no doubt that in a few years, these “bosses” will be questioning how their workforce became so inept and incompetent while their organizational performance and reputation has dropped lower than the sewers. You always get what you pay for! You’ll never get quality at a cheap price - this is true for products, services, and workers!
“You can’t expect to get a filet mignon today at 1990’s McDonald’s prices.”
Achieving long-lasting improvement goes beyond simply compensating your people well. Owners and executives should always be determined to put their subordinates in positions to succeed individually and professionally. Each person has unique skills and passions that no one else in the company can match. As executives and supervisors, it’s critical that you become aware of these skills and passions for each employee. Then, your job is to match the skills and passions of your subordinates to specific functions within the organization to help improve the overall workplace and work environment.
It can be argued that the most common reason individuals have a negative mindset about their workplace is because they’re skills and passions are not utilized and tapped into. They feel as though they’re simply a cog in a machine who performs redundant and lackluster tasks. They don’t see the value in their work and they are often put into positions aligned with their weaknesses rather than their strengths. There’s no doubt, positive people perform better than those with a deflated, negative attitude. Yet many supervisors and business leaders do not understand their role in being able to create and foster an environment of positivity.
"The workplace and culture will be tremendously transformed when you tap into the skill sets and passions of your people."
I’m a firm believer in being a lifelong learner. I feel that everyone should have this same type of mindset although I know a lot don’t. I once worked with an individual who believed that if the organization ever had plans of promoting him or developing him as a leader, they’d do so - his development wasn’t his responsibility. I didn’t understand that mindset over 20 years ago when he said it and I still don’t understand it but I firmly understand why he was never promoted!
We all should have an inherent drive to learn, grow, and improve as individuals and professionals. At the same time, executives and business leaders should make it a priority to help their people in this process as organizational improvement doesn’t happen unless you also have individual improvement. Yet many organizational leaders approach employee development from a mindset of scarcity instead of a mindset of abundance. They fear that if they spend money on developing their people that it will detract from their company profits - again, a perceived measure of business success, which in this case could make them look bad. Additionally, they’re concerned that if they invest in developing their people that they may leave the company before they get a return on their investment. So, they often do nothing and then end up employing people for 20 or 30 years who have never been developed as individuals or leaders. Not only is this wasted potential but the lack of development always has a hidden cost for the organization even if it isn’t reflected in the profit and loss statement.
Every business is about people - either you’re employing people or you’re serving people. Oftentimes, you’re doing both. Yet our metric to determine whether we’re improving as an organization rarely involves any metric gauging the quality and development of our people. Think about this: would an NFL coach who never trains or develops his players ever realistically believe that his team would win the Super Bowl? Or do you ever hear about a coach in high school, college, or the professional leagues who says that he’s not going to train or develop a player this year because this is the player’s last year of eligibility or his contract’s up and there’s a probability that he may be on another team next year? No! No coach would ever operate a team in this fashion as they all know that they must operate with what they have at the current moment and his job, as a leader, is to develop his team in the most effective way possible to maximize their potential regardless of what tomorrow or next year may bring. Yet organizations routinely fail to maximize the potential of their workforce because they’re afraid of what the future may bring instead of trying to operate at optimal levels today.
“No coach has ever failed to train or develop a player because this is his/her last year of eligibility with the team. Why should businesses operate differently?”
Conclusion
Many organizations are unintentionally operated under a penny wise and dollar foolish mindset. There’s so much pressure put on owners and executives to show a continual increase in profits that we often do things that work in the short-term that have been shown to lead to long-term problems. I get it! It’s understandable that if you ignore profits and losses today, there may not be a long-term future. But what many organizations currently do by not focusing on or developing their people, they’re creating an organization that’s chronically existing in a state of mediocrity at best.
John Maxwell famously proposes that “everything rises and falls on leadership”. I agree with this! As I mentioned last week, you can’t lead by being focused on budgets or organizational vision. Those are things that you manage, just like processes and tasks. The only business component that you can effectively and truly lead is people.
Are you leading your people to, at best, be marginal? Or are you leading your people to reach their true potential?
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