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Read one of these past issues for Insightful tips:
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Driving Profitability - Leadership
by Dave Brookmire
October 2001
Recent research has consistently demonstrated that employee satisfaction is directly related to the firm's profitability. One of the most significant demonstrations of this relationship was highlighted in Harvard Business Review's publication of the Sears case study. Sears showed the causal relationship between store-level employee satisfaction, customer service and profitability. Some of this just makes common sense, but is easier said than done for most companies. Many firm's managers typically "preach" one thing and "practice" other behaviors.
In these tough economic and political times most companies are experiencing a downturn in productivity, largely due to distractions by external events and conditions. Even if a firm is not restructuring, employees are very sensitive to friends and neighbors who have been impacted, and simply worried about their own company and job status. Understandably so, with the magnitude of our most recent events. Getting back to some of the basics now should pay dividends for you in today's times.
As your organization's leader, there are some steps that you can take to ensure your leadership team is driving profitability. These were identified in a 2001 research study by David Maister (Practice What You Preach). Over 5,000 people were surveyed across several countries and industries. Evidence showed that employee attitudes correlated with firm success. That employees must be energized to deliver superior quality and customer service. And, that managers are the drivers, and key to generating this employee enthusiasm and firm productivity.
Agreement with the following 9 statements produced greater firm profits and faster firm growth:
- Client satisfaction is a top priority for the firm.
- There is no room in the firm for people that put their agenda first.
- Those that contribute most are rewarded the highest.
- Management gets the best out of everyone in the firm.
- You are required to learn and develop new skills.
- The firm invests significant time in things that pay off in the future.
- People treat each other with respect.
- Quality of supervision is high.
- Quality of professionalism is high.
For HR professionals, the linkage to firm profitability is clear from this research. Much of what HR does should be devoted to the design and implementation of the systems that support the concepts behind these nine statements and to the selection and development of the firm's management skills. Profitability is not about creating and adhering to corporate vision, mission, policies and procedures. Rather, it is about an energized and committed workforce created and led by a capable and competent management team.
Rate your firm on these 9 elements and get a quick idea of where you may have some focus required.
I thought you might be interested in CPS' new website outlining our services (www.cpstrat.com). Your feedback and suggestions would be invaluable and greatly appreciated.
Kindest Regards,
Dave Brookmire, President
Corporate Performance Strategies, Inc.
Phone: 770-587-2265
dbrookmire@cpstrat.com
www.cpstrat.com
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