When I talk about employee engagement or leadership, people tend to think it is a soft skill. Engagement isn’t something tangible, or that shows up as a line item on the P&L statement. I must admit; I had the same thoughts. In fact, when I started by consulting business, I tried to avoid the words leadership and engagement. Yes, I tried to avoid the words that describe what I do, precisely because they sound like soft skills.  As you can imagine, that made things a bit of a challenge when explaining what I do, and probably wasn’t good business practice.  This week, I want to get into some of the hard results I experienced when focusing on leadership and engagement, that made it important enough for me to focus a business around it.

Leadership and Engagement and the Bottom Line

In EVERY business I’ve worked in or with, there were always inefficiencies that impacted the bottom line. Whether it be people that weren’t properly trained in their jobs and inefficient, or unnecessary bureaucracy, or frequent re-work because of errors and lack of communication.  These things add to labor costs, and most of the time are the cost of doing business. What would happen if they weren’t part of the cost of doing business? What if you had trained and efficient employees or if decisions weren’t bogged down by bureaucracy? Could you minimize mistakes and do it right the first time? Those are the opportunity cost associated with leadership and engagement.

Today I am going to share a few examples of hidden profit killers that I have seen throughout my working life.

Process Inefficiencies

At one point in a previous career, I was responsible for the testing of some complex engineering systems. We were the final test before the units were shipped to our customer. Because we were almost the last step in the process, there was rarely any slack in our schedule. By the time the systems showed up, we had to turn them around quickly to meet customer need dates. From set up to tear down, the whole process should have taken 3 hours.  Meaning we could easily test two systems in a typical 8-hour shift.  When I started this almost NEVER happened. Rarely could we get through a test in 3 hours.  Typically, it took almost an 8-hour shift to complete a test. Why? There were terrible inefficiencies inherent in our process.

Showing Leadership

How does this situation apply to leadership and engagement? Last week, I talked about complacency, and this is the way it is. And before I took over, that is the way it was. The difference was that someone on my staff approached me and said this was terribly inefficient, and he wanted to do something about it. He saw a problem and had a vision of a better future.  He knew there was a better way.  So, he shared that vision with me and the other members of my team, and elicited help. This is leadership.

Creating Engagement

At this point, creating engagement was easy. A better future was laid out to the team, and people wanted to be part of this process. So, I assigned a team to review our testing processes and inefficiencies to create a more robust testing condition.  I have to say the level of participation was astounding. There were second shift people coming in early, first shift people staying late. We had junior personnel and senior personnel and everywhere in between looking to create a better test environment.  The goal was to reduce testing by 50%, or from 8 hours down to 4 hours.

Results

What was the result?  Well, when I moved on, we didn’t quite get the testing down to a consistent 4 hours. On average, we got the test time down to about 5 hours. So, with two people running the test, we freed up about six man hours each night (30 hours each week) to accomplish other tasks. With the same amount of staff, we reduced testing costs, and increased productivity. Both of those were metrics any manager will be happy to see.

I could share a story where there was a recurring problem where there was a lack of leadership and engagement. But that would be boring, because they are probably still having the same problem!

This Week’s Challenge

Are you curious if there are hidden operational costs in your business?  Give us a call for an assessment and consultation and see how you can start improving your bottom line.

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If you would like to discuss more ways to help your business grow or if you feel you have a specific problem that needs to be addressed, please reach out to me.