Engaging Employees: The Economics of Micro Ingenuity
BY JOHN M. BERNARD
Wouldn’t it be a dream if every employee could add $13,000 to the bottom line of your business each and every year? No need to dream because research shows that’s exactly what happens when an employee shifts from being disengaged to engaged.
Every employee has ideas for taking waste out of their routine work. Some frontline workers see simple things that can be done to improve the customer experience and others have easy-to-implement ideas that can grow revenue.
In Business at the Speed of Now I demonstrate the economics of small ideas. A simple example is that if an employee has an idea, and that idea removes a small amount of waste from a repetitive process, it doesn’t take much of an idea to save $1,000 annually. So, using simple math, if you have 100 employees and each saves $1,000 by implementing one equivalent improvement idea each, your business adds $100,000 to its bottom line.
Now, keeping the same math in mind, if each of your 100 employees implements 10 ideas annually and each saves $1,000 then your business will enjoy $1 million more on the bottom line every year. This is how the economics of micro ingenuity pays off.
This may seem like a wild dream, but not when you realize that Toyota’s employees on average have been implementing 70 ideas annually for more than 30 years, according to Toyota expert and author Norm Bodek. At the same time General Motors implemented one idea per employee every seven years. Yes, you read that right. And this fact reveals why Toyota has grown at a much faster rate than GM, which was once the most powerful company in the world.
Toyota is a NOW company, General Motors lives in the THEN world.
Micro ingenuity is a powerful reality, and in my experience is the one true sustainable competitive advantage a company can build. But how does Toyota do it?
Next week I’ll share how Toyota focuses employee ideas on the practical reality of their daily work – the work employees can and should control.
Employee Engagement by Exhortation
Okay. Forgive the big word. Merriam-Webster defines exhortation as “language intended to incite or encourage.” In plain speak it’s about excited talk, passionate words, and loud barking. If we talk about our organization’s goals with enough energy we will create it – that’s the underlying belief of the exhortation approach to employee engagement.
The great search for ways to engage employees involves many well-intended but misguided approaches. Exhortation. Management by objectives. Tools and techniques. Over the next three posts I’ll explore each approach and reveal why they have very limited results.
Exhortation focuses on building enthusiasm through campaigns, posters, rallies, all-hands meetings, and incentives. It’s about pulling the organization together in an auditorium with colorful banners everywhere, the surprise appearance of a marching band, a new set of exciting incentives including a trip to Hawaii for the best new idea – all in hopes of inspiring a revolution in performance.
See the famous speech: George C. Scott as General Patton
It’s all about challenging people with words in the hope that somehow magically the organization will find its way through the current maze of obstacles to success — if everyone genuinely shares the excitement and “steps up” to the challenge.
The underlying belief of exhortation is that people simply are not giving it their all, and so management’s job is to entice and encourage people to do a better job than they previously have.
We’ve all seen this done. It’s hard to deny the excitement of it all. Hope is a wonderful thing!
Engaging employees through exhortation doesn’t work because it assumes employees:
- Understand the direction the organization is heading
- See how what they do every day contributes to that direction
- Know exactly that for which they are accountable
- Are able to measure their success in meeting their goals
- Have the skills, knowledge and tools to do their jobs successfully
- Know how to effectively solve problems they encounter
- Feel safe making decisions and implementing their ideas
If these elements are not in place, the exhortation approach might have some temporary impact, but in the end it is sure to disappoint everyone involved.
Wishing it doesn’t make it so.