InTouch: Comment on People Ahead Of Profit

I recently travelled to Sydney on six-day management study tour scholarship awarded to myself and two others by the New Zealand Institute of Management Foundation.
The tour included two days at the Australian Human Resources Institute national convention, day with Wilfred Jarvis, founder of Four Quadrant Leadership, and meetings with Ralph Norris, CEO, Commonwealth Bank Australia as well as representatives of the Trans-Tasman Business Circle, PricewaterhouseCoopers and NZ Trade & Enterprise.
One of the strongest themes I brought back is that the world is more than ever in need of strong, values-based, visionary leaders to drive paradigm shift in the way we manage our organisations and people. And what better evidence do we need of this than the global financial crisis. It was mentioned at the AHRI convention that more than 90 percent of people in positions of power are driven by greed, fear or self-preservation.
There’s an equation in business that many organisations and managers use involving profits, goods and services, and people. It appears to me that most businesses get this equation wrong because they put profits first, then goods and services, then the people who work for them. But the most successful organisations, the best places to work, the world’s greatest leaders will all tell you the same thing – put people first.
Take Ralph Norris. In 2007 the Commonwealth Bank of Australia’s record A$2.27 billion interim profit was attributed by commentators as largely due to the culture change that had been taking place within the bank in the 18 months following Norris’ appointment. During that time, CBA had sought to “reinvigorate” both employees and customers through changes in human resource policies and procedures. It’s simple: put people first and profits follow. So why isn’t this being done in more organisations?
If I came to your business tomorrow and asked your people to “tell me what’s really going on in this company”, would they tell me that people come first? It’s one thing to say you do it, but do you behave like you do, and do your people believe it.
“Our staff are our greatest asset.” If I hear another manager or CEO tell me that again I swear I will poke pins in my eyes. There are plenty of organisations that spend loads on food and drinks and making sure staff have good time. And they can’t figure out why their people still leave.
Two years ago we did staff satisfaction survey. Thirty-two percent of our staff were classed as unhappy. What? How can they be? We’re always having barbeques and putting on drinks. Hmph! Oh well, 68 percent of our staff are happy; let’s just concentrate on them. They’re obviously our best staff. Yeah right.
Actually, I’m pleased to say the above was not our reaction towards the results of the survey. Instead, we found out where staff thought we were going wrong. Then we did the best thing we’ve ever done – we put those staff in charge of getting it right.
People are often amazed when I explain to them that “our staff make lot of the decisions round here”. I tell them the head honchos have their names on the sign, I coordinate it and the staff run it. Obviously it’s not quite like that, but in reality our staff have lot of input. We use the Four Quadrant Leadership system and, in essence, ask staff to categorise their issues, and the decisions they want made, into one of four areas:
• Management makes the decision. No questions asked.
• Everyone has input; management has final say.
• Everyone has input and we all agree on the outcome.
• Everyone has input and staff decide the outcome. Management butts out.
We really do put our people first. Hand on heart. And our latest staff survey tells me that now they believe it too – zero percent unhappy staff. We’ve also experienced decrease in time taken to do the work and are ahead of our targets this year by 5.6 percent.
The people-first philosophy is one I’ve been passionate about for the past two years. I know it works and to hear it backed up and reiterated by equally passionate internationally renowned speakers and business people during my week in Australia confirms that what I know in my heart to be right is right. The results speak for themselves.
There are two ways of running business:
• Profit first = demotivated, undervalued, unloyal staff = high staff turnover, minimum effort = less profit.
• People first = motivated, proud, innovative, passionate, loyal staff = value-enhancing ideas, 150 percent effort, and opportunities to ‘go the extra mile’ being actually sought after = yes, you guessed it, more profit.
You make the choice.

Annette Kendall is the practice manager at MCI & Associates.

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