Productivity: The Tender Trap
Avoid the tender trap of seeing the gains as an end. View the gains as a process to help your customers. The one-two productivity punch can be one of the most powerful results-generator you have ever used.
By Brent Filson -
American businesses have recently racked up the biggest productivity
gains in 20 years, but when you look at that within the context of job
gains, it’s nothing to write home about.
Sure, productivity is important in a business. It’s what any business
must promote continually. Economists love it. Analysts love it.
Stockholders love it. It’s all about bottom-line growth, which
indicates how efficiently a business controls costs.
But there’s something much more important to business success than
bottom-line productivity gains. It’s top-line or revenue growth. Look
at the success stories of the past two-decades, the Microsofts, the
GEs, the IBMs (after the Gerstner turnaround); such companies were
successful because of top-line growth, not just productivity gains
Businesses that have an overriding focus on achieving productivity
gains can fall into a tender trap that prevents them from getting such
growth. It’s tender because they feel good about achieving such gains
and often see the gains as an end in and of themselves. But it’s a trap
because they miss great top-line growth opportunities.
Here’s how to use what might otherwise be a trap as a springboard to top-line growth.
(1) Cultivate a top-line growth mind-set. This does not mean that you
ignore productivity gains. Achieving such gains should be an on-going
endeavor. However, the achievements cannot come at the expense of
diverting resources and people away from top-line growth. In fact, the
best thing one can do with productivity gains is to make them
springboards for top-line growth. Accomplish this by seeking ways to
transform your productivity gains into productivity gains for your
customers.
A worldwide materials supplier I’ve worked with does just that. When
customers starting beating on them to lower the prices of their
products, their leaders did an innovative thing. They decided that one
of the products they would sell was productivity. They made an
agreement with their customers to help them achieve measured gains in
productivity -- in return, they would hold the line on prices.
“It was a relatively simple thing to find ways our customers could be
more productive,” one of their leaders told me. “Most companies have a
long way to go in terms of productivity.”
(2) Drive the top-line growth mind-set through all functions of the
company. Productivity gains can be made in all functions of most
organizations. The trouble is that the leaders of those functions often
don’t see the connection between their achieving such gains and
top-line growth. The materials supplier was successful in translating
their productivity gains and into gains for the customers because they
used the expertise of all their functions for the customer’s benefit.
Thus, when productivity was made to increase, say, in accounting, the
company drew on those best practices to help their own customer’s
accounting. When people of all ranks and functions see their jobs not
just in the narrow range of job descriptions but as productivity
drivers for their customers, everyone becomes accountable for top-line
growth.
(3) Make top-line growth a strategic endeavor. Don’t do it ad hoc.
Bringing your productivity gains to your customers must be a part of
the strategic direction of the company. Productivity gains are a
strategic one-two punch: your gains are only truly meaningful (i.e.
truly beneficial in a comprehensive way) when those gains are improving
your top-line by helping your customer improve theirs.
Furthermore, the productivity strategy must be complimented by what I
call a “Leadership Strategy” – getting the people who must carry out
the strategy to be its ardent cause leaders.
The materials company found that the better they were at getting
productivity gains for themselves, the better the were able to get such
gains for their customers; and when you are helping your customers in
such important ways as productivity, you are cementing powerful
relationships. As the materials company leader told me, “You can take a
customer to ball games and wine and dine them; but when you help them
get productivity increases, they become truly loyal to you.”
When I tell leaders about the one-two punch, many of them say that
their products don’t relate at all to their customers’ productivity. I
say, “Look again. You might not find a direct link with your products,
but I’ll bet you have developed productivity processes that can benefit
your customer.”
The materials company wasn’t offering their materials, they were
offering productivity, which in many cases had nothing to do with their
materials. They were offering productivity expertise and processes.
Avoid the tender trap of seeing the gains as an end. View the gains as
a process to help your customers. The one-two productivity punch can be
one of the most powerful results-generator you have ever used.
© The Filson Leadership Group, Inc. All rights reserved.
The author of 23 books, Brent Filson's recent books are, THE LEADERSHIP TALK: THE GREATEST LEADERSHIP TOOL and 101 WAYS TO GIVE GREAT LEADERSHIP TALKS. He is founder and president of The Filson Leadership Group, Inc. – Celebrating 25 years of helping leaders of top companies worldwide achieve outstanding results every day. Sign up for his free leadership e-zine and get his FREE report "7 Steps To Leadership Mastery"