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Improving the bottom line

Guest post by: Douglas Long

Article Overview: Within 100 days it is possible to achieve outstanding improvements to revenues and profits. Organisations have increased revenues by as much as $27 million in this time and both large and small organisations have proved that the results are sustainable. The key lies in the way that we lead - moving to a leadership approach that is based on engaging people both within and outside of the organisation.

Improving the bottom line

• $27 million added to revenues whilst operating costs reduced in a small, previously under-performing unit of a major financial institution.

• Increased price by $1 per tonne of basic commodity to be significantly more expensive than competitors yet customers queuing up to buy.

• Charged one of the highest fee rates in a market dominated by cost yet new clients constantly seeking their services.

These are actual results achieved by organisations in the banking, infrastructure, and professional services fields. They were all obtained within 100 days from starting a new approach and they have all proved to be fully sustainable.

Could your organisation benefit from increased revenues, lower costs, and improved profitability?

Third Generation Leadership is not “rocket science”. It is simply a new way of engaging employees, suppliers, and customers to the end of improving performance.

Think about the things that frustrate you in your dealings with various organisations:

• You go to a retail store but the staff are too busy to provide you with the service you need
• You want to get an answer to a particular problem and it doesn’t seem to be provided on the company’s web page, so you phone them – only to be kept in a queue by some automated response system that, all too often, drops you out before you can get the problem resolved
• An essential item of equipment fails and you need it repaired – fast! When you eventually get to speak with “customer service” they tell you that they are unable to give you a clear idea as to when a repair person will be able to get to you.
• For sound business reasons you operate largely on a “just in time” basis – but your supplier is now out of what you urgently need
• You need access to additional money to purchase something that has real opportunity to improve your operations but the window of opportunity to get it at the right price is very short. Your “personal” or "corporate” banker either isn’t available or won’t give you a decision in the time you need it.
• Your cash flow requires that customers pay their accounts largely on time – or at least with only a short delay from the due date. Yet you have to spend large amounts of time and effort in chasing slow payers before they develop into problem accounts and, eventually, into bad debts.

These are all typical of frustrations that are experienced on a daily basis by most of us. They are caused, in the main, because too many people are “just doing their job”.

No matter what might be said at performance appraisal time or when applying for a job, recent research shows that for many people a job is a job is a job. Although most people want to do a good job and are happy to give a fair day’s work for a fair day’s pay, it is clear that the concept of loyalty to an employer shown by length of service or going out of one’s way to provide customer service is not as common today as once it was. Employers are partly to blame for this – the drive for profits through such measures as re-engineering and other cost cutting measures showed many people that their employers felt no real loyalty to their staff. But that’s only part of the story. Today, at least in the first world economies, we tend to have a better educated, more socially networked staff than ever before. People are increasingly aware of new job opportunities as well as of poor management practices. They see their first priority as being to themselves and their families and they will do whatever this priority demands. The result is that many keep one eye on what they are doing whilst the other eye is looking for a job that has better pay and conditions.

In this situation, while there may be engagement with the work being done and there may be teamwork in the various work units, the level of engagement with the organisation’s purpose and overall performance goals tends to be far lower than optimal.

The key to obtaining the results with which I started is found in changing the leadership approach – moving from an approach in which hierarchy of some or another sort is important and in which traditional power bases are used to enforce compliance or conformance – to an approach which harnesses the energies of everyone involved. The starting point for this is shifting the brain’s locus of control away from what I term “the red zone” to what I call “the blue zone”. This shift opens our minds to new possibilities and enables managers and leaders to create a new, highly positive environment in which people want to be engaged and to provide every better performance.

Interestingly, although the examples with which I started were all in large, multinational operations, similar results are also to be found in smaller, entrepreneurial businesses.

So how can this be done?

First, learn how to listen in an empathic and emergent manner. Most of us listen in order to adjudicate, discuss, or to make a decision. There is a time and place for these but, for most of us, we overuse these forms of listening. Empathic listening takes account of the whole person with whom we are interacting and emergent listening encourages other people to discover the answers to their issues in such a way that they will become committed to the desired outcome. People who feel listened to in these ways become far more engaged and committed to you, their fellow employees, and to their organisation.

Second, learn how to question in a way that encourages reflection and learning. Make people feel safe about raising issues or taking acceptable levels of risk in order to achieve desired results.

Third, redefine your role to one in which you create an environment in which everyone can be successful. This means, in part, ensuring everyone has the necessary competence for what they are asked to do and that all necessary resources are in the right place at the right time for use by the right people.

Anyone can learn how to do these. Elsewhere in these articles on Evan Carmichael I provide pointers as to how you can learn them.

Third Generation Leadership improves the bottom line. You can be a Third Generation Leader.

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Article Tags: blue zone, bottom line, customer service, employee engagement, leadership, organisational improvement, performance appraisal, profits, red zone, third generation leadership



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