With the importance of a “realistic, clear-eyed, complete assessment of the current state” in mind, I’ll challenge you to get really honest with yourself… Do you have that clarity for your current costs in areas like turnover, productivity, or downtime? And I mean the total costs involved, not just the simple ones that show up when you submit an expense report.

If you’ve taken those numbers seriously that I shared before from the Gallup study citing BLS turnover data—and I believe they should grab everyone’s attention, even though I struggle now to picture many organizations with an average pay as low as the $35k that study referenced—you’re on board with me that we all do indeed face significant profitability killers in our organizations. The hard reality is that establishing valid baseline numbers showing the actual cost of things like turnover, downtime, and less-than-optimal productivity requires a ton of work. And once we have that data, identifying the root cause(s) can be just as challenging.

In all the years I worked in behavior-based safety, I was nearly always part of the team that conducted incident investigations following injuries or significant damage to equipment. One of the tools we used during those investigations was called the “5 Why Method of Problem Solving,” based on the idea that the immediate response given as the reason for doing something may not be the real reason. I’ve also heard similar approaches taught in sales training, but now’s not the time for that… Through an incident investigation, our goal was to dig as deep as we could to uncover every possible issue or scenario that contributed to the incident with hopes of preventing similar incidents from happening in the future in our facility and other facilities throughout the company.

We did this with injuries and with significant quality issues because those were so visible, but I can’t think of a single time where we applied this approach to turnover, downtime, or productivity. While it may have required six or seven Whys instead of just five, I’m convinced we could have identified some major contributing factors to each of them! I remember many scenarios where individuals missed their monthly productivity numbers, which typically led to disciplinary action. Fingers were frequently pointed at equipment and material issues but rarely at anything that was actually within the control of the person in question, never mind that those same individuals were often the ones who were out of the assigned work areas for fifteen to twenty minutes of every hour!

The cold, hard truth is that assigning blame to an object is far more comfortable than accepting how our behaviors impact results. This same idea holds true for measuring increased (or decreased) performance when a physical change is made in a process or the equipment that’s used in the process. With each of those factors in place, compounded by a society that seems increasingly focused on avoiding responsibility in every possible situation, I suppose I shouldn’t be all that surprised when I hear someone say, “I don’t have time for the touchy-feely stuff…” Oh, and even when we are willing to accept responsibility and change our behavior, we’ll need to sustain the change long enough to get measurable results. Remember, you might build 1,000 bridges before you’re known as a builder!

When we’re willing to dig deep enough to uncover the behaviors that are indeed contributing to that lost profitability, and we’re willing to accept responsibility for making some changes, we’ll be pointed in the right direction. This can impact every aspect of our organization if we set clear expectations for measurable results.

For more on this, you're welcome to reach out to us directly at admin@dove-development.net to get a 45 Day Trial Access to our COMPLETE Leading At The Next Level program or you can check out Wes's recently released book, What's KILLING Your Profitability? (It ALL Boils Down to Leadership!) that was a #1 Best Seller on Amazon!

Over the last several years, I’ve seen more and more references—through basically every media channel I pay attention to with ties to the overall workforce—to the importance of soft skills. More often than not, though, these references are generalizations tied to management and executive level roles, with qualifying comments like this from a recent article on Forbes.com, “Soft skills generally refer to categories like leadership, communication and problem-solving. On the other hand, hard skills are the technical capabilities that can be quantified and measured.” Much of what I’ve seen points back to a 1918 study by Charles Riborg Mann (published by the Carnegie Foundation at the time) stating that “85% of job success comes from having well‐developed soft and people skills, and only 15% of job success comes from technical skills and knowledge.”

I’m one of the loudest voices concurring with that century-old study. Still, I take issue with so much of what I see tying those skills (almost) exclusively to the success of folks in supervisory or management roles. I also take exception to the notion that only hard skills equate to “capabilities that can be quantified and measured.” That’s crap! That’s also why so many companies are in the dark about what’s killing their profitability. Before effectively addressing our highest-risk areas, we must change our focus.

The SIS International Research study I referenced before stated that “the cumulative cost per year due to productivity losses resulting from communication barriers is more than $26,000 per employee. Not only that, the study found that a business with 100 employees spends an average downtime of 17 hours a week clarifying communications. Translated into dollars, that’s more than $530,000 a year.” This cost should not fall solely on the shoulders of the folks in roles with leadership responsibility. This downtime, and the communication issues contributing to it, is an issue that touches every team member at every level of an organization!

This incorrect perception that anything perceived as a soft skill is intangible is killing our profit margins, and it serves as a significant roadblock to building a culture that attracts the best people who have the hard skills we do indeed need. With that in mind, let’s consider how this wrong focus can impact our entire culture.

For more on this, you're welcome to reach out to us directly at admin@dove-development.net to get a 45 Day Trial Access to our COMPLETE Leading At The Next Level program or you can check out Wes's recently released book, What's KILLING Your Profitability? (It ALL Boils Down to Leadership!) that was a #1 Best Seller on Amazon!

High-Risk Areas An article I found from Management-Issues.com opened: “Listen up, I will say this only once. Misunderstandings between workers and managers cost firms $37bn a year, yet few firms trouble to do anything about it.” Another Society for Human Resource Management article cited Debra Hamilton as estimating these costs to “companies of 100 employees at an average of $420,000 per year.” While the idea of “misunderstandings” lends itself to poor communication (and we’ll certainly be addressing that specifically soon), that’s definitely not the only way it’s killing our profitability!

Throughout the time that I had significant hiring responsibility in my full-time roles, and even with the work we do today, it has been rare to see organizations have so many highly skilled individuals on staff that they aren’t at least passively looking for great talent. In the most challenging scenarios, I’ve seen the high demand for talent push managers and business owners to do what resembled beginning to perform CPR (check to see if the candidate was breathing and look for just the faintest pulse even if they weren’t breathing) before extending a job offer. When I was hiring for one particular skilled trade, the manager I was supporting said he needed at least seven new employees for those positions in the next five days. I was holding all five applications we had gotten to that point. I explained that we might be better off serving a restraining order on two, but he was welcome to pick any seven he wanted from those five. After glancing at what we had to work with, he decided his needs were less urgent than he had let on!

Although he and I didn’t see eye to eye on everything, that was one case where he chose not to sacrifice at least some level of quality for the need to fill his open spots. Unfortunately, many decisions the management team (that he was a part of) had made in the twelve months or so leading up to that conversation had drastically changed the approach we had to take to find candidates and even to maintain a decent culture with the folks who were already there. That opens the door to one of the biggest misunderstandings I’ve seen organizations make: prioritizing an immediate need for a certain skill set over ensuring the person with those skills has similar values! We can undoubtedly plug a hole in the short term with someone with relevant skills. Still, a mismatch in values, or not making sure the company values are clearly understood from day one, can kill profitability for the duration of the working relationship! Having the slightest focus on values from the start can provide a foundation for everything we do moving forward and help us capture profit that can otherwise be lost altogether. Once we’ve nailed that down, we can call attention to what’s likely hanging on the wall in our lobby (or somewhere prominent), but no one considers it on a routine basis—which makes it our next high-risk area that’s pretty simple to address…

For more on this, you're welcome to reach out to us directly at admin@dove-development.net to get a 45 Day Trial Access to our COMPLETE Leading At The Next Level program or you can check out Wes's recently released book, What's KILLING Your Profitability? (It ALL Boils Down to Leadership!) that was a #1 Best Seller on Amazon!