In Good Times Or In Bad:
Soft Skills Save Hard Money
By Doug Cartland
The most important thing in business, including the material handling industry, is to have a great product or service. The second most important thing is to have a great team culture.
About ten years ago, top executives across America were asked to calculate
how much a poor team environment cost them in real money. They came up
with this incredible figure: Between 25 and 40 percent of the corporate,
business or organizational budget is consumed by poor team skills! (William
V. Haney, Communication and Interpersonal Relationships Text and Cases,
Sixth Edition, 1992)
To validate their math, these executives described a poor team culture with words and phrases such as these: duplication, hurt feelings, grudges, retaliations, office feuds, baseless rumors, grievances, loss of customer confidence, turnover, waste, sabotage, strikes and absenteeism. I would add these: improper goals or vision, loss of employee confidence, improper delegation, breakdown of trust and misuse of talent.
Stealing From the Bottom Line
Have you ever had two people or departments do duplicate work because
the right hand doesn't always know what the left hand is doing? If so,
time is lost. Do your managers deal with hurt feelings, grudges, retaliations,
office feuds and baseless rumors among team members and departments? If
so, time is lost again. And we know time is money. Indeed, lost time is
lost revenue. We don't just lose vacant time, we also spend energy, emotion
and brainpower that could be better spent on creative ideas, satisfying
customers and forward thinking. So we lose the time AND the positive use
of that time.
Any non-results-oriented, nonproductive, noncreative and inefficient use of time steals directly from our bottom line. So do we avoid dealing with problem issues when they arise because dealing with them consumes time? Nope. We create a team culture that minimizes their existence.
I am certainly not a money-grubbing, “bottom-line's-the-only-thing” kind of person. But this I know—greater efficiency and productivity equals time saved, which in turn equals money saved and a healthier bottom line. The healthier my bottom line, the more secure my people are in my business and in their futures, and morale goes up.
Make no mistake about the importance of morale to an organizational work culture. Napoleon said that a successful army is “three parts morale and (just) one part physical ability.” The positive morale itself makes us more efficient and more productive. So team skills bring about greater efficiency and productivity, which improves morale, which brings about yet more efficiency and productivity. In essence, the positive culture feeds upon itself and creates our greatest opportunity for an endless cycle of upward progress.
What happens when a vision is communicated poorly and a team meanders along not knowing where it's going? Or what happens when goals and objectives are not clear, attainable, measurable and specific? Time, energy, emotion, brainpower AND money is substantially wasted once again.
Team Culture
The effect is not only internal. Our team culture affects our customers'
confidence and their desire to do business with us too. Part of my background
is in sales and sales management both in corporate America and family
business. In the 1980s I sold business telephone systems. In my first
few weeks on the job, I had a potential client I was working hard. We
had developed a great working relationship and I felt quite confident
that he was about to spend his $15,000 with me. My competition was trying
to sell him basically the same phone at the same price. But the customer
liked ME. At the end of our last face-to-face meeting, he told me he was
going to give me a final answer in two days. In the meantime, he called
my office to confirm a couple of facts that I had given him. Their answers
were different from mine. Now, I have not always been right in my life
(for people who know me this is a shocking admittance), but I was right
this time! My customer was unnerved by the inconsistency.
I met with him later and he said these exact words to me: “Doug, I believe in you, but I'm not sure if I believe in your company.” He bought the other phone system. Fifteen thousand VERY REAL dollars were GONE from my company because we were not all on the same page! Team skills save money—I tell you they do! Have you ever called a company for help and felt like you've gotten four different answers from four different people? How much confidence did you have in that company and, more to the point, how much did you want to do business with them? We all know the answer. Indeed, this is just one way in which poor team skills cause a “loss of customer confidence.”
How can “turnover” be a result of bad team skills? One way is quite simple: Good people won't stay in bad cultures. Not only do they usually grow impatient with the petty environment, very often they are taken advantage of in that culture. They'll get tired of it, burnt out, disgusted, and they'll have options. So you'll go through the costly turnover process and, in addition, be left with only the bottom-feeders. Bad cultures feed upon themselves too, and they spiral a business downward.
Subtle Sabotage
When thinking of the word “sabotage,” most people get visions
of covert operations, spy vs. spy, bugs and the CIA blowing up bridges
or someone's computer system. Those things may happen once in awhile in
business, but there are subtle sabotages that happen everyday. Anytime
anyone does or says anything that takes away from anyone else's ability
to do their job effectively, it's a subtle sabotage of their projects,
jobs, careers and of the business itself. Often it's to make one person
look good at another's expense. This game of sabotage is another that
steals the efficiency and productivity of our teams. The biggest weapon
in this game is gossip!
Gossip leads me to another item on the list, and that's the breakdown of trust. Team building is relationship building—the better the relationship, the stronger the team. This is true as we work with our customers (relationship selling is always best), and it's also true within our work teams. Relationships properly and professionally built bring about unity, gratitude, helpfulness, open communication and ultimately efficiency and productivity. The basis for any relationship, of course, is trust. Trust is the bond. One of the behaviors (though not the only one) that dissolves that trust, or that bond, is gossip. Gossip dissolves and unravels relationships, our teams and our organizations. I'm not brazen enough to believe that we can eradicate gossip completely. But we also don't need to consider it and its effects inevitable either.
I've touched on just a portion of our list and we can already see the costs mounting. We could still discuss the efficiency, productivity and money-stealing practices like grievances (more time consumed), loss of employee confidence (saps energy and morale), improper delegation (a common failure that leaves our teams emaciated), misuse of talent (when our people are not doing what they do best, they are less efficient and their morale drops), strikes and absenteeism (Have you ever calculated hours missed?).
Be Vigilant
We always need to be vigilant about our bottom line, but even more so
in this fragile economy. The approach many business owners take is to
make cuts either in the labor force or in things that benefit the labor
force. Unfortunately, the effects of these cuts are almost always negative—they
only serve to impale the morale of the workplace. Nothing says, “We're
going down the tubes” like cutting and taking away!
I'm also not saying that work forces never need to be trimmed, or that we don't need to reorganize if we are fat and undisciplined in places. We owe it to ourselves, our employees and our customers to have our team working at top efficiency and productivity. The easy thing to do is take away. It's a little harder to be a responsible, loyal and caring leader. But the payoff is much greater.
Instead of working from the bottom up by eating away at our labor force and its benefits, let's first work from the top down with great leadership that produces a team culture that spawns greater efficiency and productivity and saves us money.
If we've built our relationships correctly and are working at our most enthusiastic, efficient and productive levels, then “growth” may become the watchword instead of “cuts.” In a relationship-building culture, the tendency of our teams is to respond with loyalty and greater effort. This in turn gives us the best opportunity for a material handling company to thrive during the good times and, assuming we have that great product or service, is the best insulation against the bad times. Believe it!
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