As a result of the worst financial recession in history, companies have spent the last couple of years downsizing and reducing spend in every way imaginable as a means to sustain liquidity, cash flow, profitability and for some mere existence. This was the dictated course of action for survival. And frankly, this worked for many. Revenues for S&P 500 companies declined 10% year-over-year while profits increased 6% and liquidity on the sidelines is now at an all time high.
But opportunities to sustain shareholder value by downsizing and making expense reductions have been all but exhausted. Those lemons, as we like to say, are dry with no more juice left to squeeze out. Achieving shareholder value in the future will largely be determined by how well companies are able to win the hearts and minds of their people and leverage their intellectual capital specific to driving their key financial strategies. The big winners will be those leaders who finally recognize that it is all about their people being ready, willing and able to execute.
The ultimate objective for any business is to get its leaders and employees to truly take ownership and to be accountable for the financial success of the organization. That said, we don’t just want passive ownership & accountability; we want engaged and energized ownership and accountability. We want players at all talent levels to be able to elevate their game. So what will it take to enable greatest contribution at all levels of the organization? It is really quite simple. It will require us to finally show our employees the “why?” behind our business.
History continues to show us that companies will: 1) go to great lengths to define their strategies; 2) invest lots of dollars in communicating what the strategies are to their employees; and 3) institute lots of measurements to manage the execution of the strategies. So what is missing? How about the “why?” in all of these components? Why do we believe that people don’t want to or need to understand the “why?” behind what they are being requested to do? As leaders, do we really believe that people will give their absolute best possible effort because “it’s their job”? Any of us who have teenage kids know that the simple answer is no, they won’t. Yes, they may do what is demanded or requested to avoid consequences, but the odds that they will deliver the best effort is low at best. This holds true for employees, too.
It is amazing to think that this one, three-letter-word could be so critical to our success. In fact, this simple word is the greatest single opportunity we have to exploit as leaders, since it is the only way we will optimize the execution of our beloved strategies through our employees. To achieve this, we need to help our employees see the “why?” so they can understand, align, internalize and personally own the business outcomes.
To optimize individual and functional contributions, we need to shift how we think about our employees. We need to move to a management model that continues to communicate what the strategies are and how they will be measured, but also begins to include “why?” these are our strategies. This is the only way we can shift the culture and mindset to an ownership mentality, which is what will create the greatest groundswell of success.
Here is what we know: Humans want to contribute. Humans want to be valuable and relevant. Humans want to be a part of something successful. These are all basic human drivers. To further illustrate this, we will share the insightful words of one of our senior clients. He said, “As leaders, we must keep in mind that no one shows up to work everyday looking to suck at it. They all want to perform.”
Knowing that people genuinely want to–and need to–contribute, it is our job as leaders to start subtly shifting their awareness and capabilities. We need our people to Think, Speak and Act like owners in a multi-dimensional fashion. This means thinking multi-functionally, which leads to better collaboration and the elimination of functional silos. And, they must think financially. Connecting cross-functional thinking with financial implications is the essence of truly Thinking, Speaking and Acting like owners of the business:
- Understanding our financial ecosystem
- Understanding our investment decision/resource allocation decisions
- Articulating our ideas using the language of finance
- Creating the right infrastructure within the organization to drive adoption of this ownership culture
It’s time to align, enable and motivate people in a new way that will lead companies to the fruitful results they are seeking.
Sales, Marketing and Management
consultant at JNR Incorporated.