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Increasing Productivity in Hard Times

 

Every organisation at some time goes through hard times. This may be down to mistakes of judgement it has made or because of external market conditions. It’s at these times when engaging the whole workforce in productivity improvement becomes a critical issue.

 

There are seven factors to address to achieve this.

In summary they are:


- Communication
- Cuts
- Confrontation
- Creativity
- Collaboration
- Capabilities
- Celebration

 

I shall cover each in turn.

 

Communication

This is time to substantially improve the quality and quantity of communication. Employees are not stupid. They are in touch with what is happening but they may not know the whole picture.

Communicate the brutal facts. Employees need to know results and trends over the last year/two years. They need to see the facts and figures in a clear and tangible way. These facts may include trends in the organisation’s market share, sales and profitability figures, competitor activity and its impact, market-place predictions and customers’ likely demands.

Share what the organisation is doing to confront these challenges, what is working and what more needs to be done. The message should be upbeat and positive with a ‘we can do it but we need your help’ message.

Introduce and formalise a communication process. For example the CEO should introduce monthly face to face communications with his/her direct reports, and the next level down, on key messages to be passed on to employees. The CEO should address all employees informally, at their locations, bi-monthly, face to face or via video conferencing. This should be a two way communication, including questions, concerns and feedback. The CEO needs to be highly visible in his/her communications.

Also in addition monthly briefings should be introduced to encourage top down and bottom up communication.

The message is ‘communicate, communicate, communicate’ and engage employees at all levels with the current realities. Be honest, be open and win their trust. You cannot over communicate in hard times.

 

Cuts

Pay cuts and compensation pain should start at the top with the CEO, Directors and Senior Management.

In hard times it is totally unacceptable for Senior Managers to be awarded 11% pay rises annually and employees 1% or worse still nothing. It is immoral and plain wrong.

In hard times the owners of the business and the already well paid senior management need to be seen to be setting an example. Their pay and bonus cuts should be significant and demonstrate their commitment to the future of the business. They also need to make other obvious statements by driving less expensive cars, staying at less expressive hotels and taking cheaper flights.

This is a time for servant leadership and the leaders need to be seen to be taking their leadership role seriously.

At the same time this should be a time for reassurance and the message should be that no staff pay cuts or cuts in numbers should be necessary if together we can increase productivity. This message is one of total teamworking through the hard times and beyond.

This is a time for the CEO and his/her team of Directors and Senior Managers to walk the talk when it comes to making sacrifices for the good of all. Make no mistake all eyes are upon them.

 

Confrontation

Turn the crisis into confrontation. Confront the enemy – that’s your competition!

In hard times your competitors will savagely reduce prices and attack your customer base. The result is that your market share falls and their’s rises. Your sales and profitability are falling at the same time. This must not be allowed to happen. You must renew your external focus and fight the competition.

Focus on three of four key issues or ‘battles’ you must win to take on your competition and the market-place. Call these ‘Must Win Battles (see the book of this title), or something similar. These should be initiatives which will involve everyone in the organisation becoming externally focussed and fighting the “enemy”.

Examples of such battles might be:
- Creating a greater variety of customer service offerings including flexible pricing
- Involving your internal departments with key suppliers in improving customer distribution and servicing processes
- Using tele-sales and e-commerce more effectively to increase higher volumes of cost effective sales
- Broadening your product/service offerings
- Speeding up research and development processes to get products to market faster
- Increasing customer communications; demonstrating the financial value you bring to them; improving account management
- Getting to know key decision makers in key accounts better and building positive relationships with them to open up new business opportunities.

Cost wasting internal issues also need to be addressed aggressively. For example:
- Can you afford to support any longer an ailing part of the business?
- Does that new product idea now really need to be scrapped?
- Must that piece of technology causing you real problems really now need to be replaced?
- Does the internal culture and values now need to change significantly?
- Are there key people who are not performing and really need to go?
- Is the current structure working or does it need to be changed?
- Is this a time for considering changes in key suppliers?

All these and other questions should be considered to make the organisation a fully effective operation, capable of winning major battles. Wake up the organisation, kill complacency and go on the offensive!

 

Creativity

Now is the time to tap into the creative abilities of your workforce.

Human beings can be enormously creative if they are allowed to be!

In hard times you get out of trouble by not doing more of what clearly does not work! Problems need to be re-thought. The status quo needs to be robustly challenged. Processes need to be changed drastically. The objectives of all activities need to be questioned. Old norms of internal working practices need to be changed. Linear, rational thinking needs to be replaced by creative, innovative thinking.

So what can you do? Here are some tips:
- Engage with individual employees to find out what contribution they could make. What are their natural gifts, talents and strengths they can bring to their job (if they were allowed to!)
- Involve them in solving a problem at their level. Pose the problem as a question e.g. “How can we reduce the number of products returned by customers?” Turn the problem into a ‘battle’
- Train employees in creative and innovative thinking processes and problem solving skills
- Form teams of employees to tackle problems at their level. Encourage them to be self-managing teams. Appoint facilitators e.g. managers/supervisors from other teams to help them
- Put time frames to problem-solving initiatives, make them short and urgent e.g. 2 to 3 months maximum
- Praise successes and encourage more involvement in daily continuous improvement processes

When you fully engage your employees with your challenges you will be amazed at the results. Not only will you realise their talents but you will motivate them and make them feel a valuable part of your business, vital for enhancing their psychological contract with you.

Get creative, make step changes re-invent the business and just see the employee energy that is released!

 

Collaboration

Hard times can really benefit organisations. Why? Because no one has all the answers anymore and the opportunity for collaborative working suddenly appears.

This is a time for creating a partnership way of working between managers and employees, internal departments, the organisation and its suppliers and the organisation and its customers. The historic mindset must change from command and control to collaborate and co-create!

Vertical functional and independent ways of working need to be replaced by horizontal, cross-functional and interdependent ways of working. In hard times functions cannot be allowed to work in isolation they need to bring their own individual expertise and know-how to other teams to create a ‘one team’ approach to meeting the challenges the organisation faces.

This requires stamping out competition between internal teams, not allowing any teams to opt out of co-operative working and putting collaborative, creative working high on the agenda.

Managers should be encouraged to adopt a less directive and more participative way of working with employees.

Your account managers should talk afresh with major customers and your purchasing managers should talk with key suppliers to explore ways to work more in a collaborative partnership for mutual benefit. Move from a competitive mind-set to a collaborative mind-set.

The beauty of collaboration is the need to share, to be open and honest and to allow the creatively for problem solving to flow. Your organisation will be able to make step changes as a result.


Capabilities

In hard times organisations should seize the opportunity to train, re-train and upskill the capabilities of their managers and employees. The time is now available to do this, and this is the time to do this!

Accept that things won’t get better overnight but investment in your people will enable you to capitalise on the change in market conditions when it comes.

Train your managers to be modern managers by changing their management style to be more inclusive and engaging. Train them to be leaders of change and entrepreneurs. Turn them into coaches. Show them how to empower people by working less “in the business” and more “on the business”. Get them to delegate more, to think strategically, to plan more effectively. Quite simply increase the capabilities of all your people. Challenge them, stretch them and grow them.

It sends out the signal that you value them and that you are investing in them. If you are short of budget for this purpose pay for the training and development from cuts in senior management salaries!

Let’s face it your business is your people. There isn’t always the time to invest in their development, but now there’s the time. It’s also the time, to send some big new signals on how you want to commit to continuous people development. That is turn will increase staff motivation and productivity.

Formalise your people development commitment by introducing Personal Development Discussions between managers and their staff. Grow your people and they will grow your business.


Celebration

Now for the best part – the celebration of success.

Let’s recap. You have:
- Communicated the brutal facts,
- Cut costs at the top,
- Turned a crisis into a confrontation with competitors,
- Engaged and empowered people with creative/innovative thinking,
- Instilled a collaborative, interdependent and partnership style of working into the business,
- Embarked on a programme of increasing people capabilities and developing their potential

What’s missing? Quite simply, celebration! Lots of open, generous and frequent celebration.

Celebration of success should be evidenced at an individual level (e.g. employee of the month), at a team level (e.g. internal of external customer feedback on team’s improvements), at a functional or divisional level (e.g. improved results) and at an organisational level (e.g. improved market data and press comment).

Celebrations need not be extravagant. People would question them if they were! They need to be fun and enjoyable, and most important of all they need to reward everyone’s hard work. They can be paid for out of productivity improvements. If you’re stuck for ideas employ the services of a specialist adviser/organiser in their area.

Celebration fuels the fire of success, it fans the flames of personal desire and it sets ablaze the market-place as what you do is noticed and admired by others. What an impact it can make!

 

Conclusion

So that’s it – the seven ‘C’s of increasing productivity in hard times. It’s all common sense really but that of course is the first thing to go when organisations run into hard times!

 

Further Help

 

To view our downloadable, reproducible and customisable products on this topic, view the following:

 

Empowering People
Building Partnerships between Internal Departments
Successfully Managing Change
Variable or Performance Related Pay
Running Team Briefings
Creative Thinking

 

 

Jeremy Francis
CEO Buy and Train
June 2012
www.buyandtrain.com