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No Guts – No Glory!

I just returned from conducting a Workshop on Continuous Operational Performance Improvement (C.O.P.I.). After the Workshop, the President of the company and I engaged in a healthy debate over my recommendation that his company implement the Formula for Success in the WorkQuake© that I set forth two weeks ago as one of the Ten Tips for surviving the current economic crisis.

I just returned from conducting a Workshop on Continuous Operational Performance Improvement (C.O.P.I.). After the Workshop, the President of the company and I engaged in a healthy debate over my recommendation that his company implement the Formula for Success in the WorkQuake© that I set forth two weeks ago as one of the Ten Tips for surviving the current economic crisis.

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I argued that the Formula, ½ X 2 X 3 = P(2) (Half the Workforce Paid Twice As Much and Producing Three Times As Much equals Profit and Productivity), should be the company’s guiding light in the current economic crisis. In response, the company’s President argued that his company was already a “lean, mean fighting machine” and it would be impossible for it to operate if half the workforce was eliminated. He also dismissed the second portion of the Formula because, if the Formula was implemented and half the workforce eliminated, to pay the remaining half of the workforce twice as much as they are currently being paid makes no sense since the marketplace allows the company to hire and retain “good” workers at the company’s current rates of pay.

My response to his arguments:

1. On a daily basis, 50% of a company’s Employees are only doing enough to not get fired! And 80% of Employees could perform significantly better if they wanted to. Don’t believe me? Then ask the company’s front line leaders and discover what I continually assert: the company’s core employees (20% of the workforce) are working at 110% of their potential; the Temporary Employees (60% of the workforce) are working at between 50 and 80% of their potential; The Others (20% of the workforce that should have been fired yesterday) are working at less than 50% of their potential. These numbers may be a bit skewed during this time of layoffs and shut downs because fear can be a great temporary motivator and even The Others can be temporarily scared into better performance – but it will not last. So, do the math and it’s apparent that getting rid of half the workforce that is not working to their full potential is not such an extreme idea after all. And eliminating the others and the low performing temporary employees will please the core employees and cause the remaining temps to work harder at becoming Core Employees.

2. No company should be hiring and retaining only “good” employees! To thrive in the WorkQuake© of the Knowledge Economy companies need to hire and retain “great”, not “good” employees. And the only way to recruit employees capable of becoming core employees is to start by having a hiring process that identifies high-performance potential and offers those people with that Potential starting wages significantly greater than the competition. To develop, retain and motivate core Employees also requires greater levels of compensation. Cash is still king for most employees. While employees are not motivated by the annual 3% wage increase (anything less than a 10% increase has no motivational value), they would be motivated by a 100% increase, especially if that level of compensation was predicated upon performance that had to produce significantly greater results.

The Bottom Line is: The current economic crisis gives an extraordinary opportunity for every company to reevaluate its business processes and its human capital — to survive the current crisis and to prepare for the economic boom that will inevitably occur. But to exploit this opportunity requires a shift in perspective — a realization that the way things have been done is not the way they need to be done. It is the ability to accomplish this shift in perspective that will determine the winners and the losers in the Knowledge Economy. So, does your company have the guts to explore doing things the way they need to be done to achieve the glory?

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