Meridian Group - Company Culture Consultants

This month's real-life issue is from a client in a highly competitive business with slim profit margins. My interviews with employees revealed that top management was pushing hard for cost cutting and sales increases but not tapping into employees' ideas, nor conveying a clear sense of direction. The result was a largely demoralized workforce with many defections to competitors—a brain and body drain that spelled disaster.

Managers react swiftly when the red ink flows. Unfortunately, the rush to action often focuses only on the end result—not the cause. Leaders often forget to engage employees as they cut costs and push people to work harder.

Large profits come with a united sense of direction and people making good decisions. Good decisions come from open communications that engage the right people—usually those affected by the decision. People will engage when they experience strong relationships. The picture looks like a pyramid:

How Your People Can Sustain—or Sabotage Your Profitability

I have often seen managers push hard for profits and actually make things worse. Why? Because employees feel the cost cutting and the push to work harder and but they don't feel the pull to be engaged. They feel the pressure but they don't feel invited to be a real part of the solution. The result is further alienation, lower morale and—ironically—often a drop in productivity.

People will deliver profits—if they choose to. People will bring new ideas, creativity, innovation, procedures and solutions—if they choose to. When leaders create a work culture where people choose to deliver results, they get their profits in abundance—no problem.

As one 20-year veteran manager in this company said to me "If top management does have a plan, they are not telling us. Every year they reorganize. They are making cost cutting decisions without involving us. They don't even seem to know we exist. People here used to give 150%. Now we are burned out. We don't care anymore. And I include myself in that." It is no wonder corporate profits are pinched.

So what to do? People want to be productive, to feel a valued part of the team. People want to help solve problems for the group. So how do you tap into this, even when the heat is on?

Inform and Invite

The first step to involve people is giving them information. What led to the sudden need to cut costs and improve performance? Lay out the numbers—sales, orders, the market, competitors, costs, income, profits, or whatever is relevant. Give people the big picture and the small one. If some decisions have been made on cost cuts or reductions let them know, but ask for their involvement in implementing or improving the decisions.

Invite everyone to join with you to seek new ideas and actions to meet the challenge. Agree to meet again soon to discuss people's ideas for changes and improvements. Hold regularly scheduled meetings so people know you mean it and are committed to working with them. You might invite people to meet with you one-on-one but discussing ideas with everyone in the team together is far better.

As people talk through their ideas and agree on actions, help them take responsibility for putting their ideas to work. You are their coach. You set the stage where people choose commitment.

With a process like this, you will get better ideas for improvements and savings and will develop a motivated and committed team that puts ideas to work. As we said earlier: "When leaders create a work culture where people choose to deliver results, they get their profits in abundance—no problem."



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	A Better Workplace --- Meridian Group's Newsletter, Number 14, 12-17-02

	Where Did the Profits Go? Look to Your People, the Prophets of Profit! This month's real-life issue is from a client in a highly competitive business with slim profit margins. My interviews with employees revealed that top management was pushing hard for cost cutting and sales increases but not tapping into employees' ideas, nor conveying a clear sense of direction. The result was a largely demoralized workforce with many defections to competitors—a brain and body drain that spelled disaster. Managers react swiftly when the red ink flows. Unfortunately, the rush to action often focuses only on the end result—not the cause. Leaders often forget to engage employees as they cut costs and push people to work harder. Large profits come with a united sense of direction and people making good decisions. Good decisions come from open communications that engage the right people—usually those affected by the decision. People will engage when they experience strong relationships. The picture looks like a pyramid: How Your People Can Sustain—or Sabotage Your Profitability I have often seen managers push hard for profits and actually make things worse. Why? Because employees feel the cost cutting and the push to work harder and but they don't feel the pull to be engaged. They feel the pressure but they don't feel invited to be a real part of the solution. The result is further alienation, lower morale and—ironically—often a drop in productivity. People will deliver profits—if they choose to. People will bring new ideas, creativity, innovation, procedures and solutions—if they choose to. When leaders create a work culture where people choose to deliver results, they get their profits in abundance—no problem. As one 20-year veteran manager in this company said to me "If top management does have a plan, they are not telling us. Every year they reorganize. They are making cost cutting decisions without involving us. They don't even seem to know we exist. People here used to give 150%. Now we are burned out. We don't care anymore. And I include myself in that." It is no wonder corporate profits are pinched. So what to do? People want to be productive, to feel a valued part of the team. People want to help solve problems for the group. So how do you tap into this, even when the heat is on? Inform and Invite The first step to involve people is giving them information. What led to the sudden need to cut costs and improve performance? Lay out the numbers—sales, orders, the market, competitors, costs, income, profits, or whatever is relevant. Give people the big picture and the small one. If some decisions have been made on cost cuts or reductions let them know, but ask for their involvement in implementing or improving the decisions. Invite everyone to join with you to seek new ideas and actions to meet the challenge. Agree to meet again soon to discuss people's ideas for changes and improvements. Hold regularly scheduled meetings so people know you mean it and are committed to working with them. You might invite people to meet with you one-on-one but discussing ideas with everyone in the team together is far better. As people talk through their ideas and agree on actions, help them take responsibility for putting their ideas to work. You are their coach. You set the stage where people choose commitment. With a process like this, you will get better ideas for improvements and savings and will develop a motivated and committed team that puts ideas to work. As we said earlier: "When leaders create a work culture where people choose to deliver results, they get their profits in abundance—no problem."