Month: June 2014

Is your organization too LEAN to Grow?

Efficiency is good.  In most markets you better be running an efficient operation or you won’t be able to compete and make margin.

At least that is the conventional wisdom.  However, Porter taught us that all margin does not come from reducing operational costs.  Margin comes from value.  Cost is just part of the equation.

I have nothing against reducing costs by driving waste out of the system.  Part of our firm’s practice is LEAN consulting.

That said, I’m starting to see a symptom across organizations that is going to require a shift in mindset to resolve.

When the economy tightened up at the end of the last decade, companies had to LEAN up to survive.  Everyone pulled double duty for the good of the organization.

While there are times when that is necessary, you can only run your team in a sprint for so long.

How do you know if you’re too lean to grow?  Here are five indicators.

1. It’s a big deal when someone takes vacation.  In fact, that job just doesn’t get done.
2. Your existing staff are so busy doing their jobs, they do not have time to develop others.  Bench strength is a huge competitive advantage.  How is yours?
3. What would happen to the quality of service if your marketing efforts were just 10% more effective?
4. Are your key players feeling burned out?
5. Are you starting to see your A-Players jump ship?

Business is about balance.  A machine that is operating at 100% efficiency by definition can do no more.

If you are trying to grow revenue, make sure you aren’t too lean to do so.

One of the top three things we see consistently on surveys of CEO concerns is attracting and retaining high performers.  If you want to build a great organization, you need great people.

Leadership IQ did a study in April of 2013 on employee engagement and its relationship to job performance.  The results confirmed my experience all along in organizations that were not “healthy.”  What the researchers found after surveying employees at 207 companies was that 42% of the high achievers in those companies felt disengaged.

Here’s the reality.  Those people are looking for opportunities elsewhere.  There are always job opportunities for high performers.

So how to you attract and keep them?  Here are 6 musts.

1. It starts with a cohesive, high performing management team.  These A-Players do not want to work in an organization with dysfunctional management.  They need to see and feel that the leadership of the organization are working well together and have a common goal.
2. Next, create clarity about the organization’s culture and values. This should ooze from the existing management and employees.  It should be tangible, not just marketing or annual report fluff.  It has to feel real and be real.
3. Let them know what the role entails and how that contributes to the overall goals of the organization. High achievers want to know they are making a valuable contribution.
4. High achievers want to also know what opportunities exist for advancement.  It’s very important that you don’t embellish or oversell any of this.  If you do, you will find yourself interviewing candidates for this role again.
5. Another part of advancement is training.  Not just technical training, but opportunities to grow their professional and leadership skills.  Is it sink or swim, or do you have a formal training program in place?  High achievers want to be developed and given new opportunities for growth.  This also helps them feel appreciated for their contribution.
6. Reinforce the culture and values of the organization.  High performers want to see that you are serious about the things for which the organization claims to stand.  If you claim that you only hire the best of the best, but the screening process and existing employees don’t reinforce that, the hypocrisy will be noticed.  This is a huge red flag to any high performer.  High performers want to be with other high performers.  If they feel the tide is turning, they will hit the door.

Even if you are doing all these things, high performers will not stay with your organization forever.  We always set a goal to have the kind of people in our organization others wanted to recruit.  Occasionally they would recruit someone away because we simply didn’t have the right opportunity within our organization. However, we always encouraged and supported them in their move, and those people actually became our biggest recruitment tool because of how highly they spoke of our organization.