When was the last time you really saw your entire team step up, get excited about your employee engagement activities, become passionately committed to something, and all pull together to change for the better? It’s magic when it happens, and I was privileged to see a sea-change with one of my clients in the past 90 days that has transformed a paralyzed, fearful team into a powerhouse of execution, one step at a time. Here’s how:
- We started with mindset. I always say that the only person who likes change is a baby with a wet diaper. When they participated in the Profit in Plain Sight Kickoff Workshop 13 weeks ago they realized that they’d been living in a cold wet one. Initial skepticism vanished and was replaced by “how do I help”.
- We helped each of them understand how they could make a difference. We established a wildly important goal of doubling their Customer Profitability Ratio and they created a scorecard that showed them exactly what to do to achieve that goal. Then, we layered in learning and a just-like-brushing-your-teeth rhythm of focus and accountability where each person made a weekly commitment to help move the ratio. Since then, they’ve huddled and collaborated weekly to identify who their most profitable customers are, update the scorecard and action plan to shift behaviors (internal and customer) that were negatively affecting profitability. Slowly but surely, they’re moving the ratio and feeling energized and in charge as they see results.
They’re all pulling together in the weekly employee engagement activities because this is a manufacturing company in trouble. They’re in a price-sensitive industry where a bid won or lost has a huge impact on their numbers – they know they need to create the kind of value that wins bids at good margins. And they’re plagued by the high cost of reworks due to some production quality issues that we’re going to tackle in the next 90 days. So even jobs that they win can sometimes end up costing more than they’re worth. Sound familiar?
Prior to starting ProfitU, the employees were feeling pretty helpless, and staff turnover was an issue. The leadership is very transparent about the numbers, and everyone wanted to be part of a solution, but simply didn’t know how. They were scared, demotivated, and fearful for their jobs. They’d already tried all the conventional strategies: sales folks were trying to chase more new business… but often at margins that just dug the company in deeper. The executive team did some deep cost-cutting including layoffs, putting training on hold, travel cuts etc, but found out that it was a drop in the bucket. After all, you can’t shrink your way to growth.
They were reactive, not proactive, and focused on the myth that more sales equal more profit. In fact, 40% of the companies who increase sales in a given year actually DECREASE profits and are growing in the wrong direction!
Employee Engagement Activities Allow Everyone to be Part of the Solution.
Everyone now realizes they have a role to play in creating profitability that goes far beyond number crunching and relies solely on small shifts in behaviors. Their early wins so far include:
- Gracefully exiting customers who could not be turned around (rather than continuing to work for free by accepting business that cost more than it was worth). That one simple step has been shown to double profitability.
- Changing some of their own “self-inflicted wound” behaviors, such as financing their customers by allowing receivables to age well beyond 120 days. They’ve had an immediate positive impact on cash flow.
- Experiencing the wake-up call that just 17 of the 140 customers on their post-workshop scoreboard are the ones keeping them in business – and putting plans in place so that everyone has a role in retaining those customers NOT at all costs, but in a way that creates value for both parties. When just 5% more customers are retained, typically profits double.
- Identifying new business development opportunities for more of their products and services in existing accounts, because they now understand that their best source of new business is old customers. It’s early days yet, but they’re working the plan.
- Matching marketing spends to customer profitability. No more good-ol’-boy lunches or deep discounts for business from unprofitable customers! Instead, the CEO is investing 1-1 “listening time” with each of the clients they must retain, to ensure that he brings the voice of the customer into every meeting.
Can you afford NOT to implement this type of employment engagement activity? Research with over 90,000 employees worldwide found that only one in five employees are fully engaged, and that has a tangible impact on profit and growth. Firms with low levels of employee engagement experienced a 33 percent decline in operating income, while in contrast, those with high engagement saw a 19 percent increase in operating income.
When you’re ready to create more engagement and higher profits, contact me for information about ProfitU, the innovative, online-learn-by-doing program this team is implementing to create tangible, take-it-to-the-bank results. ProfitU is applied learning done weekly in-house by a cross-functional team and takes less time per week than employees are spending on email. In just the first 90 days, this company has poured the foundations to double their profits and then double them again in the coming year. During the next 3 semesters, they’ll apply more than 50 additional Profit Accelerators to build a strong, sustainable bottom line that will take them from barely surviving… to absolutely thriving.
I have only 10 ProfitU places open in 2017 and will be implementing a price increase in the 2nd quarter, so if you know you need to improve profitability and you know you want to increase employee engagement, let’s talk! Email me and we’ll set up a time to explore where you’re at, where you want to go, and how ProfitU may be able to help you get there.