Legal performance enhancer

Forget the cliché 'people are our greatest assets'. Managers who can't even remember their operators' names usually say it. What's the difference between a motivated workforce and one that is thoroughly fed up? About a third more productivity, that's what. The founder of scientific management, Frederick Winslow Taylor, established it through a rigorous empirical study nearly a century ago and little has changed since. It's a lightning bolt of a statistic – people work a third harder if they are really engaged with the business. If they are not, that's a third of your potential profits down the drain. According to Steve Brown, manufacturing and R&D director at Olympus KeyMed (OKM) – one of 2010's winners in the Best Factory Awards – you can almost smell an unhappy workplace. "In any factory you can sense the atmosphere – positive or negative – just by the body language. But if you walk around a factory and people are only too happy to tell you about their job at any level of the organisation, it's a good sign. It shows they are proud of it." If the malaise could be cured as scientifically as it was measured, there would be no unhappy workplaces. This is manifestly not the case. For decades, managers have thrown ideas and rewards onto the shopfloor in the hope of a miracle. DAK Consulting's Dennis McCarthy vividly recalls his days as a young industrial engineer: "I spent a lot of time devising incentive schemes, only to discover pretty darn quickly that if people were motivated by money, it was far easier for them to generate overtime than to work harder. In the years since, everything I've seen shows that people are not motivated by money – it's simply a demotivator when you don't have it." Conversely, he's come across plenty who "wouldn't do what management wants because management wants it. That's not money – but it's not the kind of motivation you want either." He believes McKinsey's findings are incontrovertible (see box , left). "People want to be told they are doing a good job. Praise from managers scores better than throwing money at the issue – and it costs you nothing." He has long abandoned his youthful notions about the value of individual productivity schemes. "The way to motivate people is to think of the productivity of the team rather than the individual. Modern manufacturing is all about working together and sharing ideas. It's your relationships with other people that have most impact on motivation in the workplace." Steve Brown arrives at a similar conclusion by a different route: "If you don't pay people fairly, they can become disgruntled or disenfranchised, but if you pay them reasonably, it's not a big factor in motivation. In my experience, what really matters is being treated fairly and kept informed. It takes frequent, frank and full explanations about the good news and the bad. Honest, open communication provides a good framework. If people have got issues and know they can raise them safely and they get an answer – even if it's not the answer they want – I think that is a powerful tool in creating a team." 'Team' is something that figures highly in both men's workplace perspective. McCarthy counts a sense of inclusion as one of the highest motivators in Robbins' list of six human needs (see box overleaf, p26). It's tempting to dismiss the list as psycho-babble but my tasting panel included the head of a global company and a storekeeper and it worked for them all. McCarthy actually goes further – if team inclusion is good, then giving that team the opportunity to learn and improve is even better. It will do so with more determination and success than individual members. One of the weaknesses he finds in many organisations is a refusal to set accountability anywhere other than at individual level. In his view, the actual process of continuous improvement through teamwork goes a very long way to fulfilling all six of those human criteria. Of course, performance doesn't improve simply through grouping people in a cosy ring. They need goals, direction and – most critically – an investment of time. "Obviously frontline people go to work to make stuff," McCarthy explains, "but you need to give them 5% of their time for improvement activities to overcome problems and weaknesses in the processes. If you have structured it right, you are making people feel slightly uncomfortable by taking them out of their normal working environment, but you are giving them something interesting to work on. Think of the time people spend on Sudoku because they want a challenge – if you can give them that challenge and direction in their working life, and it also helps to bring success and secure their job, you get positive motivation." There are upstream advantages. "Coaching is a great way of becoming a leader – and it's much more manageable to coach a team than an individual. It takes less time and lets you see how individuals are working within that team." He points out that high-performance companies like Dell actually enshrine time to coach (or be coached) in KPIs across all levels. For frontline teams it's 10% of their time, for middle managers about 40% and senior managers about 80%, although that would also encompass deploying strategy into specific internal and external projects. McCarthy also believes relationships are vehicles for motivation: "By taking people out of the daily grind, you have a chance to bond them in projects that the business needs. With the right management processes, those above will be keenly interested in seeing it succeed and everyone wins." He sees a lot of companies with pockets of improvement made by people who got frustrated and fixed it. Getting them to move from that to something that works all the way through the business is tougher. Motivation comes from someone listening to the problems and helping you do your job better. Instead, he hears, 'why didn't that order go out?' – which often translates as 'why didn't you do your job?' And if the only thing that managers talk about is failure, people get turned off. McCarthy recalls the best office manager he ever knew. One day, he heard her say to one of the staff, "How can I make today more interesting for you?" "I was her boss but I learnt so much from her," he reflects. OKM 's approach plainly works. Its Best Factory Award was won as much by its superb development of its staff as its process improvements. Three of its production managers started on the shopfloor; the head of manufacturing joined as a quality inspector; and the head of business development – who assesses market needs for new products globally – originally came to the company on a Youth Opportunities Programme. This is a company that believes in motivating people, encouraging improvement and recognising the results through promotion. Brown says the importance of training cannot be overestimated: "If someone is developing their knowledge and capability, it benefits the business but it also benefits them, too. They see it as positive." But it goes further. "We'd all like a unique technology but you can't wake up every morning with a killer idea. But if you consistently train your employees and stretch them to use their capabilities to the full then – all else being equal – you are in better shape than your competitors." There are, however, two sides to this. As a medical devices manufacturer, OKM works in a stringently regulated market. Initiative has its boundaries. As a result, the visual indicators on its shopfloor are unmistakable. "We all understand here that to remain competitive and secure, we need to continuously improve how we do things," explains Brown, "but anyone wanting changes has to accept they will undergo a very thorough validation process. If you have an idea, you have to work with a team to make sure there aren't any downsides. When you fully understand the current process, you can see the strengths and weaknesses and the better equipped you are to look for improvement." OKM can trace productivity and defects back to the person responsible for the process but it's used as a trigger for further training and to spot high performers, not to blame. Like McCarthy, Brown sees blame as a real demotivator. "In a lot of cases, the mistakes happen because they can – the real test is 'could I have made that mistake?' and the answer is usually 'yes'. It's often a fault in the process design rather than the person." What single action would Brown take to kick-start flagging morale? "Set a vision that looks attractive to everybody and is synonymous with success. Paint a picture of the way it's going to be in the future and keep communicating it over and over again. That's the way to engage people. Be honest with them – tell them it will be horrible for a while yet but if we keep doing the right things towards this goal, then it will come." Once that vision is set, you can turn your attention to the tactical improvements like 5S which make people feel better working in a place that feels well-organised and clean. But Brown is adamant that the tactical stuff is not enough by itself. "People want success and they are clever enough to know that their own depends on that of the organisation. So you need that comprehensive picture of a smart, well-organised operation with good performance and innovation." What kind of leadership does it take to see the vision through to the actuality? "I see two types of managers – the box tickers and those who help other people to be successful," reflects McCarthy. "People will walk through fire for the latter." Both Brown and McCarthy are adamant that old school JFDI belongs in the ark. "For as long as you give a direct instruction in that manner and watch them doing it, you'll get that task done," says Brown. "But the moment you turn your back, you'll have a big productivity or quality problem. You need people to be motivated when you are not controlling them." There's one style that's even worse in his book: "Managers that like to be popular and avoid difficult messages are frankly a menace. JFDI is actually preferable – at least people know where they stand. You need to be clear and truthful about the situation: even if it is bad, show how we are going to tackle it together and how we will benefit collectively." And what is the final motivator? "Saying 'this is what we are going to do is fine' – but 'I need your help to do it' is better." recognition counts Source: June 2009 McKinsey global survey of 1,047 executives, managers and employees Financial incentives Effectiveness Performance-based cash bonuses 60% Increase in base pay 52% Stock or stock options 35% Non-financial incentives Effectiveness Praise and commendation from immediate managers 67% Attention from leaders 63% Opportunities to lead projects or task forces 62% "Money is the most expensive motivator and is no more effective than other non-financial methods of recognition." Dennis McCarthy, DAK Consulting what everyone wants Tony Robbins, US expert in leadership psychology and success coach, identified six universal human needs. People who satisfy most or all of these in their normal working lives are likely to be highly motivated contributors. If some or all of these needs are unanswered, they will turn in a lacklustre performance and save their real enthusiasm and energy for activities outside the workplace.

• Certainty/comfort: To know what's expected of you and how to do it.
• Variety: Paradoxically, there needs to be a certain amount of uncertainty to make life interesting.
• Significance: To know that what you do is important and matters to those around you.
• Connection/love: To feel part of a community [or team] with mutual care.
• Growth: To become better, improve skills, to stretch and excel. Robbins says the degree varies but the need is there in everyone.
• Contribution: To contribute something of value, to make a better place.