Communication

I am currently doing management consulting with a company outside of Rochester. It has been awesome to see such a motivated group, especially at the top level of the company. They are at an important stage, one that many successful entrepreneurial companies go through. In the book I am reading right now, Growing Pains, they talk about how growth causes the need to change from an entrepreneurial management style to a professional management style.

In this case, the past decision making of the company was dictated by the owner and an inner circle. Until recently, the people constantly looked to them for approval on many decisions they are more than capable of making on their own. But for years, this is the way it was. "What does the owner think? I need his affirmation."

What is nice about now is that the owner sought me out and said he wanted help in empowering people to make decisions. He knows that there is not enough time in the day for him to have his hands on everything. Thus, the important step in the company’s future moves them toward a professional management style.

The point of this post is to share what happened yesterday. The operational processes of the company have sped up to the point where some of the front line staff thought the company was doing poorly. They felt there wasn’t enough work. What they didn’t realize was that because the production process has become more lean, they are making more, faster. They are doing a wonderful job and are exactly where they need to be as the boom push continues.

The key is this: The old management style probably would have not known the front line was frustrated. They would have been too busy doing other things to realize it. But because the new style is taking place, there was a company wide meeting. The owner spoke to all 80 employees. He told them that they are exactly where they are supposed to be. The vibe in the room exhaled in relief, then applauded at their accomplishments.

That open, constant communication, from CEO all the way to the front line worker was and is essential. People need to know where the company is at and where it is going. The front line perspective was wrong, and it was hurting production and morale. One 45 minute meeting caused a major turnaround. Even better, I had nothing to do with setting up the meeting. The professional management style is pulsating. They are on the track, moving forward to great things.

Innovation

The drive to harness the energy of the workforce might start within the HR department, but it cannot stop there. There must be buy in from the CEO, from the top managers, and most importantly from the immediate managers. Without buy in from these groups, this will be just another initiative, not an innovation. The April 24, 2006 BusinessWeek discusses the world's most innovative companies. The front cover shows the who's who of today's successful businesses and some of the things they are doing to stay on top. Almost all of the how to's deal in one way or another with people.

An interesting concept they talked about was CEO's becoming innovators-in-chief. The top dog sets the tone and culture of the company, large or small. If they are open to new ideas and try new things, their people will too. If they are risk adverse, the company will show it.

In order for people to be passionate about work, the management of the company needs to make it a priority to take steps to allow that. They need to see how much of an influence they have on their teams. I was trained perfectly on this. “People usually don’t quit their company, they quit their boss.”

You may hire great people, but if your management is weak, the great people will go somewhere else or be miserable and not produce like they are capable of.

Wegmans

FORTUNE magazine said for 2006 the #2 Best Company to Work For in the U.S. is Wegmans, a grocery store chain headquartered in Rochester, NY. In 2005, Wegmans was the #1 Company to Work For according to FORTUNE. How does a company who you might not have ever heard of accomplish such lofty recognition? By focusing on the satisfaction of their employees.

Chairman Robert Wegman said, “No matter what we have invested in our people, we’ve gotten more in return. I have always believed that our path to great customer service began with that investment. That philosophy has proven itself many times over.”

I regret to say Mr. Wegman passed away a few weeks ago. It was a huge event in Rochester. There is no doubt he left a major mark on this area, on his industry, and on company/employee/customer relations.

I know Wegmans well. I grew up in Rochester, NY. Most of my book was written while I was in Rochester, NY. A lot of my friends from high school worked at or still work at Wegmans. And this much I can say about Wegmans. When I went away to college in Arkansas, when I was at grad school in South Carolina, when I was working in Memphis, Phoenix, and Charlotte, and when I was on the road, the one thing I had to do whenever I came back to Rochester was to go shopping at Wegmans. That's how great of a store it is. That's how well their philosophy works.

Wegmans has passionate employees, but they also have profitable businesses. Invest in your people and it will come back to you.

Manufacturing CEO

I interviewed the CEO of a 200+ employee manufacturing company a few months ago. He was brought in from the outside with the task of "bringing organization to chaos." There was a major disconnect between management and the line. He focused on the front line workers, asking them a series of questions. At first, it was not about speeding about production. It was about personal motivation: "What is expected of you everyday? Who do you report to? How can we make this a more pleasant work epxerience?" The answers he received were astonishing. It was in fact, chaos. He defined roles, empowered front line management and implemented many of the ideas to change the work environment.

From there, the goal was to figure out how to produce more, while eliminating a defect rate that at his hire date was close to 10%. Again, he went from the bottom up and asked the front line people: "How do you do it? What can we do better? How can we do it differently?" After analyzing the information, they implemented new processes based on the information of the line. Imagine the feeling of ownership of a front line worker when the CEO actually listens and implements an idea! Their effort skyrocketed because they are now part of the process. They were not told do it this way because we say so, they told the boss how to do it better.

Via implementation of new processeses and constant communication throughout all members of the company, the chaos was calmed. The results were astonishing. Turnover went from 30% to less than 5%. The defect rate went from 10% to less than 1%. And sales increased by over 50%. All because they harnessed the power of their people.

He laughed as he told me the story. "Andrew, wisdom comes from the line, not the CEO office."

Motivated Workers

Recent Gallup studies show that the U.S. losses over $300 billion each year due to unmotivated workers. The May 2006 Business 2.0 magazine says that 65% of workers planned to be looking for new jobs in 2006.

The business community has done a great job in creating new technologies and implementing new ideas to speed up productivity. But now, with information flow so rampant and ideas easily accessible to all, including your competition, the one area that companies can still differentiate themselves from their competition is in their people. People are an untapped competitive resource that needs to be focused on and corrected.

People do not want to hate their job. They don't want to be looking for new work and hopping from company to company. We all want to succeed. Companies must figure out how to harness the energy of their people. Great things will follow for the company and for each person working there.