The Performance Gap

There is an ever widening gap in the work place between job proficiency and job productivity.

During the time of America’s industrial revolution in the early 20^th century there was a clear standard the existed with regard to the wages to be earned and the work to be performed.

There was a profound performance protocol that linked job proficiency with job productivity that made them virtually inseparable. The accepted standard for compensation in America’s burgeoning industrial organizations was known as “piecework”. 

Wage incentives in the form of piecework were intended to successfully boost worker efficiency, effectiveness and output. In turn, industrial workers were self motivated to increase their personal competency, skill proficiency and productivity. The end result was a win-win scenario for both the organization and the worker.

The piecework concept was straight forward and simple. Moreover, it provided a clear and resounding answer to the worker’s #1 concern when it came to their job -- The proverbial W.I.I.F.M question… “What’s In It For Me?”

As we fast forward to present time, the 21^st century post industrial period offers little in the way of wage incentives. Even in the once lucrative sales business, most sales people find that their supposed sales bonuses and awards are always just beyond their performance reach. Their incentives are more theoretical than reality, because the organization itself is the one that is creating the set points for the bonuses and awards which are based on the organization’s revenue requirements as opposed to the respective capabilities of their sales force.

In our current age of information technology the relationship between “proficiency” and “productivity has become virtually nonexistent. 100 years ago piecework ruled the roost and salaried positions were few and far between. Today, the vast majority of job positions are either fixed salary or a flat hourly wage with little or no option for overtime -- As a high percentage of employers have adopted a stringent no overtime policy as a result of the Great Recession.

With rare exception, other than a few remaining trades, the piecework model has become an antiquated dinosaur. True productivity has become severely impaired as a direct result of the lack of achievable wage incentives and worker motivation.

As adolescents, your workers received scholastic based proficiency testing to determine what they had learned (what they know). In contrast, as adults the real world focus shifted to what can they “do”?

The reality is that adult workers in mass are not fully utilizing the skills that they have already acquired. This is attributable to a variety of contributing causes that include a lack of personal motivation, work ethic, incentives and the inadequacy of their leadership to engage them.

Authentic leadership bears the responsibility of bringing out the best in people by helping the organization and its people to use their talents, abilities, skills, education and professional training more often, more effectively and more successfully. This will ultimately enhance worker proficiency while increasing organizational productivity.

The Leadership Academy… Changing the way organizations and people work, perform and live.

Copyright © 2013 Developing Forward | Thomas H. Swank, CBC | All Rights Reserved.

Knowledge Is Not Power

For the record, I’m quite serious about the above ascertain. Like myself, you most likely hear people saying that “Knowledge is power” on a regular basis. But, have you ever stopped to really question this statement? If knowledge really is power, how is it that so many well educated people are performing in such a mediocre fashion?

How is it that technology companies that employ scads of IT Consultants have internal technology issues and then wind up engaging the services of an outside IT Consulting firm to come in and assess their problem? The last thing that their company or any company truly needs is another “expert”.

This exact same scenario occurs with engineering firms who like wise turn to an outside engineering consultant to fix their engineering problem. In fact this is an accepted practice in virtually every field of business and industry.

If mere knowledge was power… Then these companies wouldn’t need to consult with external sources of expertise in their own field. Simply take a moment to consider that these employers recruited and hired their IT people and engineers based on their education, training and experience in the first place. There is an abundance of talent already on board with these employers. If there is one thing that these organizations are not lacking… it’s people with plenty of “smarts”.

In her book “Mastering the Rockefeller Habits”, author Verne Harnish recalls a story about Charles Schwab the CEO of Bethlehem Steel Company in the early 1900’s. CEO Schwab was conversing with a management consultant who inferred that Schwab’s people gain more knowledge around managing.

Charles Schwab responded with the now famous statement “What we need around here is not more knowing, but more doing! If you will help us to do the things we already know we ought to do, I’ll gladly pay you anything you ask!”

Like any bright consultant would do, he took CEO Schwab up on his challenge and then asserted “In 20 minutes, I’ll show you how to get your organization to do at least 50% more.” The advice which then provided to Charles Schwab was to:

● Write down and prioritize your 5 most important tasks to complete in the next business day.

● Put the list in your pocket until tomorrow when you will take it out and start working on number one.

● Look at that item every 15 minutes until it’s done.

● Then move on to the next and then the next.

● Don’t be concerned if you only finish two or three or even one because you will be working on the most important things. 

Charles Schwab who was compensated in the amount of a million dollars a year by Andrew Carnegie for his leadership abilities and expertise stated that “this was the most profitable lesson he had ever learned.” What exactly was this valuable lesson you ask? It was this:

The organization whether small or large that understands and executes on the power of focusing on priorities will progress and succeed.

CEO Schwab paid the consultant $25,000 for this sterling advice, which in the early 1900’s was a huge sum of money. Especially when you consider that it was for just a few short minutes.

I completely concur with Charles Schwab that knowing is void of value unless there is real doing… For knowledge only has power when it is applied and subsequently implemented.

Copyright © 2013 Developing Forward | Thomas H. Swank, CBC | All Rights Reserved.

Build A Better Business

Throughout the annals of history there have been countless times when the hallowed halls of Ivy League institutions of higher learning and the walleyed investors of Wall Street simply didn’t get it right.

Given the continuing economic uncertainty… This may be such a time.

As a business executive, entrepreneur or public servant you need to shift your focus from what isn’t working and make every attempt to refocus your attention on who and what is in fact working in these tumultuous times.

For there is a very specific group of business organizations that comprise virtually every segment of business and industry that are doing extraordinarily well… even in the New Economy. These unique organizations encompass supermarkets, engineering, construction, photography, staffing, holding companies, industrial components, manufacturing, architecture, electrical equipment, environmental services, dairy, retail, sporting goods, motel management, technology and more.

The common component that all of these companies regardless of size, stature or business classification share is that they are all “employee owned”.

Some of the household names of employee owned organizations that you are undoubtedly familiar with include Publix Supermarkets, Piggly Wiggly, W.L. Gore, Davey Tree Experts, Kinney Drugs and Graybar Electric.

Unlike traditional business organizations that employ a “top down” approach to their operations, employee owned organizations hold to a “bottom up” business philosophy that accommodates each employee’s status as an owner.

Publix Super Markets is currently the largest employee owned company in the United States with revenues of over $24 billion and more than 140,000 employees. Publix has the esteemed distinction of being one of the “100 Best Companies to Work for in America”. Publix stock which is tightly held by its employee owners, has (since the company first launched) grown twice as fast the S&P 500 index at a rate of more than 19% percent per year.

A ranking of the Top 100 companies by Fortune Magazine in 2009 revealed that 14% of the companies listed were in fact employee owned. Moreover, this trend and its underlying business model are on the grow globally. The John Lewis Partnership is a 81,000 employee owned corporation that owns the largest department store chain in England, the Waitrose Supermarket chain and other brands. Over the course of the past decade, JLP grew faster than Macy’s and in 2011eclipsed 13.7 billion dollars in revenue.

One of the organizational attributes that contributes to the success of employee owned companies is that the organization’s accountability is to the employees themselves and not a group of external investors or shareholders.

In like fashion, employee owned organizations take their mission and “value” proposition earnestly to heart. It’s no longer a meaningless platitude, rather it is a set of basic principles that everyone can believe in, take pride in and govern their individual actions by.

Employee owned organizations typically have excellent communications that flow freely throughout the organization while promoting ideas, creativity and innovation. As well, employee owned organizations generally have a unique perspective with regard to organizational alignment of talent, skills, experience and expertise. This occurs through the process of having those employees with the greatest levels of expertise in a given area of operation making or recommending the decisions for that portion of the organization’s operation.

As for the benefits of an employee owned organization, you need only consider the research performed by Harvard and Rutgers which confirmed that employee ownership fosters high performance, lower employee turnover, increased trust, greater shareholder value and long term sustainability.

Clearly, there is much to be learned from employee owned organizations that can be applied to your organization regardless of size or industry that will help you to build a better business.

Copyright © 2013 Developing Forward | Thomas H. Swank, CBC | All Rights Reserved.