OR THRIVING IN THE MIDST OF CHAOS
How do two classic, “All American Manufacturers” thrive in the midst of today’s economic chaos? The first case study is an Ohio machine tool builder with $150 million in sales. The second is a Pennsylvania consumer products manufacturer and distributer with 350 employees. Both not only survive but thrive in today’s economic climate. How many businesses can say 2012 was one of their best years ever?
We have been fortunate to have both companies as clients for over ten years, and have observed and identified first-hand the common denominators of their success. Like many manufacturers, they stay abreast of technology, invest in the latest process and quality tools, and have first rate IT functions and sound financial management. However, we believe what gives them a distinct competitive edge is their hands-on leadership and a culture where every employee is financially impacted, every month, by the company’s financial performance.
All employees – top to bottom – are fully engaged in the business, every day, every week, every month. Whether it is the VP of sales or operations, human resources, finance/accounting, a production manager, machine operator on the floor, or the shipping clerk. They all have one thing in common. Everyones paycheck, this month, is going to be effected by the performance of the company.
It is difficult to adequately describe in writing the stimulating, positive, energetic culture, when a VP or manager walks through the offices or plant and no matter who they see, can genuinely ask “how is our bonus going to be this month”? And everyone knows the answer, because they are all looking at the same scoreboard. It’s exciting when the topic of discussion around the lunch room really is, what can be done to make it even a better month. The culture of everyone truly sharing in the fruits of success enables a business to achieve levels of performance and productivity only dreamed about by others.
There is no organizational substitute for every employee having real “skin in the game”. One team, one goal, win/lose, real outcomes, real time, real money… real serious. No technology, no methodology, no Lean, 5S, Blackbelts… nothing can drive organizational performance more effectively then employees who truly care and who know their pay is significantly effected this month by results. After thirty years of experience with hundreds of companies, one thing we know for sure – fully engaging your employees in the performance of your business will give you a level of performance you never knew you had. We refer to it as discretionary performance. Performance they could put forth… IF. If what? If there was a compelling reason and structure in which to do it. VP’s have it, middle managers have it, hourly employees have it. Every employee top to bottom has significant discretionary performance to offer. And it’s probably worth millions to the business if you can get it. Employee discretionary performance is always available, but rarely tapped. You have to be intentional in design and execution if you want to tap it.
A word of caution; I am not describing a bonus or incentive system. Rather a robust, comprehensive, organizational strategy to define, measure, pursue and reward results.
We have been providing intentional strategies to engage all employees and link their compensation to business results, real time, for 30 years. Now more then ever, the business challenges of 2013 require the successful enterprise to create a culture and operating strategy to truly engage their employees as described. Tapping your employees discretionary performance is no longer a luxury, but rather a necessity to compete successfully today.