Want to improve productivity?Hire better managers

Although many people are talking about the end of the recession and a post-recovery economy, the truth is that productivity in the U.S. and worldwide has remained stagnant for decades.

The conclusion of Gallup’s No Recovery report found that real GDP per capita growth has slowed from highs of 3% in the 1960s to only 0.5% in 2016.

What does that kind of slow economic growth mean for individuals? One common standard for measuring prosperity is the belief that the lives of our children will be better than our own. For most people, it is a humble wish. They don’t want to become millionaires; they just want to know they are “getting ahead” and that the future is bright for the next generation.

A 2.5% to 3% rate of growth in productivity will lead to a doubling of the standard of living within 30 years, in other words, in one generation. A 1% growth rate will take three generations to reach the same gains. And we are hardly meeting that standard if we accurately measure productivity.

As Gallup Senior Economist Jonathan Rothwell writes, “Using multifactor productivity, it is clear that no period since 1973 has approached the 1948 to 1973 period in terms of efficiency growth.”

What Can We Do to Raise Productivity (and Prosperity)?

There are many explanations for our stagnant productivity. Some suggest it’s due to a lack of major technological or scientific breakthroughs. Our own No Recovery report argues that certain sectors (education, housing and healthcare) have been consuming economic growth while not providing better outcomes.

Many people are working to increase productivity through digitization and globalization efforts, and through the optimization of natural resources and capital, both financial and human. Better transportation infrastructure and affordable housing would also help.

But these projects are complex and typically require large private and public capital investments.

What if there was a way to boost productivity that cost significantly less? Something that got to the heart of the problem in a direct and tangible way?

What if we could change the way people worked?

Old Boss vs. New Boss

When we think of the term “management,” we think of control. For the past 30 to 40 years, that was the idea of management: controlling and supervising processes and people.

The manager was the senior, experienced person who knew how to do things right and how everything was supposed to fit together. Advancement by seniority made sense because experience mattered a great deal.

And yet today, when it comes to the biggest problems in business, the manager doesn’t know the answer. Nobody knows the answer. There is no process.

Managers must hire people who are smarter than themselves and unleash them to do things nobody has ever done before. Managers are charged with creating things that don’t yet exist. They can’t simply copy their past experiences.

Even more so, customers and employees no longer sit still and accept what they are given — which means managers must be more flexible and creative when it comes to problem-solving. Carrot-and-stick methods of motivation just don’t work anymore, primarily because most routine work has been automated.

In short, the world has changed, but too many organizations still have a management philosophy from the days of the assembly line.

In his book Drive: The Surprising Truth About What Motivates Us, Daniel Pink identifies three key motivations:

  • Autonomy
  • Mastery
  • Purpose

 

 

But these words rarely show up in job descriptions, recruitment material, performance reviews or annual meetings.
The truth is that today’s worker is motivated by much more than a paycheck and job security.

They are looking for meaningful work, genuine relationships and personal growth.

Many of these things — like a sense of purpose — can’t be bundled into a perks and benefits package; they must be communicated and regularly reinforced by an engaging manager.

The Boss Effect

Gallup analytics finds that 70% of the variance in team-level engagement is based on the manager. This can be attributed to three factors:

  • Employee perceptions of the manager
  • The manager’s level of engagement
  • The manager’s talents

A company can have the best performance management system in the world — but it’s the person in the manager’s seat who matters.

You can have the best employee experience strategy in your industry, but those who have the best bosses have the best experiences.

We know the power of a good coach. When our children join sports teams, we know intuitively that the coach is everything when it comes to our child’s experience, enjoyment, performance and positivity. And yet, when we go to work, we forget all of that.

People experience teams. Those aspects of an organization traditionally associated with the executive level — brand, culture, values — are experienced by employees primarily through the relationship with their manager. Leaders envision culture, but managers bring that culture to life.

The Fix: Transforming Management

If organizations want to drive higher productivity, the place to start is with the transformation of the manager:

  1. Hire individuals with a natural talent for managing people.

    When companies systematically pick candidates with high management talent, they can achieve 27% higher revenue per employee than average.

  2. Train your managers into coaches.

    Many managers today are not ready to have frequent developmental conversations with their teams, but regular listening and feedback are essential skills for talking about performance and growth.

  3. Drive manager engagement in order to drive employee engagement.

    Employees who work for highly engaged managers are 59% more likely to be engaged.

According to our recent State of the Global Workplace report, 85% of employees are not engaged or actively disengaged at work.

The economic consequences of this are approximately $7 trillion in lost productivity. If 70% of that number can be attributed to managers, then one solution becomes clear: It’s time to transform management for good.

Gallup can help you transform management at your company:

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Are Your Customers Coming Back for More?

I usually don’t write about the restaurant industry but this has far-reaching implications for every industry that needs to retain customers. So read on!

There’s a sushi place a friend of mine loves like crazy. She says it’s similar to every other Japanese restaurant in her town, except for one thing: “Every plate is little work of art.”

Food arranged like flowers, flowers that are food, elaborate sculptures made of barware, noodles and tea lights – she’s so delighted by the operation’s “talent, creativity and care,” that this restaurant is, to her, synonymous with eating out.

My friend is an engaged customer, the kind every restaurateur needs. Not wants, needs because in today’s slow-growth, competitive food service environment, the customer has extraordinary power and reach.

Restaurants have to deliver a consistent, engaging experience at every single location, on every single channel, every single day, for every single customer.

Sixty-one percent of Americans ate out at least once in the past week, Gallup research shows, choosing from an endless list of dine-in and delivery options. Establishments they can choose to post a public review of online — while the food is still hot. And these critiques can go viral in a hurry.

That’s real consumer power.

To meet the challenge it presents, restaurants have to deliver a consistent, engaging experience at every single location, on every single channel, every single day, for every single customer.

Engagement Drivers

I mentioned above that my friend is an engaged customer. Gallup defines customer engagement as an emotional and rational attachment to a product or business.

And that engagement? It’s lucrative. According to Gallup’s research, customers who are fully engaged represent a 23% premium in terms of share of wallet, profitability, revenue and relationship growth over the average customer.

To understand what brings customers in and keeps them coming back, leadership needs to understand customers’ emotional and rational attachment — and their spending.

Emotional drivers aren’t about the quality or taste of your food — these are just table stakes in today’s world, and any restaurant can replicate them.

Customer engagement is about experience, specifically the way a restaurant makes a customer feel — welcomed by the overall atmosphere, cared for by the friendly service, delighted by the talent and creativity of artistic chefs.

Customer experiences should be unique to you, at least a little, but always aligned with your purpose, brand promise and values.

Different outlets require different expressions of those things, but whether dine-in, delivery, take-out or catering, the brand experience should be maintained.

In fact, Gallup data shows that food and beverage customers who are familiar with and aligned with your brand give you 39% more share of wallet.

Customer engagement is about the experience, specifically the way a restaurant makes a customer feel — welcomed by the overall atmosphere, cared for by the friendly service, delighted by the talent and creativity of artistic chefs.

When you have determined the most engaging experiences you can deliver consistently — across all channels and every outlet — correlate them with your customer performance metrics to assess your progress. That’s critical for positioning your service operating model.

A winning service operating model is a great differentiator in the competitive U.S. market, but it should be built into the system in foreign expansion efforts, too.

In every case, understand what the data is telling you, create a plan, follow up on that plan and make changes when you need to.

Just don’t take your eyes off the data that tell you about your customers’ feelings and experiences.

A net promoter score tells you if customers are willing to recommend you, which is helpful. But it doesn’t reflect customers’ emotional engagement, which is a much more powerful driver than overall satisfaction.

To that point, fully engaged casual dining customers make 56% more visits per month to that restaurant than the actively disengaged do. Fast-food customers make 28% more visits.

Those customer metrics and the strategy for how to maximize them are in leadership’s hands. But all the data in the world won’t help managers unless leadership gives them tools they can use to create a consistent customer experience.

One of the most beneficial tools is a system to sustain employee engagement for customer-facing team members. Their engagement numbers are important — and too often undervalued.

That’s a serious mistake because the people nearest the customer have considerable power over their experience.

Customer Facing

To a customer, the folks on the floor are the brand promise.

Indifferent team members won’t go to the trouble of delivering on the brand promise, and the actively disengaged won’t mind if they drive customers away.

So customer engagement and experience is downstream from employee engagement, and both largely depend on the local manager: 70% of the variance in their engagement comes down to their manager, Gallup finds.

Leadership can help local managers engage team members, deliver a consistent brand experience and ultimately engage customers by doing these five things simultaneously:

Identify the experiences that create customer engagement.

Align them with culture, purpose, values and brand promise.

Make sure they’re deliverable across all channels consistently, yet are still specific to the needs of each channel’s customers.

Draft specific, actionable, and correlated behaviors aligned with culture, purpose, values, and brand promise that managers can put into action.

Hold managers accountable for consistent delivery of these behaviors.

It’s a lot, but today’s customers expect a lot. In fact, leaders who place employee engagement and customer engagement data in one graph get a resulting picture of what matters most to customers. That’s the qualitative and quantitative data that drives your business.

But a manager can only use the tools leadership gives her.

Field support helps by assessing local metrics and reporting them contextually to HQ. But leaders design the systems that sustain culture, employee engagement, customer engagement and the brand promise. If those systems don’t support those things, leaders undermine managers — and ultimately, their own business.

The Way to a Customer’s Heart

And that’s why I used my friend’s favorite sushi place as an example. Her response shows that the leadership there is doing everything right.

When people gasp and take pictures of their plates, they’re building your market for you on social media.

They could go with authenticity, or lower their prices, or flood the market with locations. But those strategies are easily emulated.

Instead, they allow their chefs to go nuts with presentation, in a way only theirchefs can. To make every meal an engaging event.

My friend’s reaction shows it’s a winning decision: Every single visit, her plate makes an appearance on her Instagram feed.

Word of advice — when people gasp and take pictures of their plates, they’re building your market for you on social media. Follow their feeds and tell the stories behind the meal to heighten the customer experience.

My friend’s favorite sushi place has leaders who know how to strategize — and I’d bet they’re executing every point on The Golden Thread with excellence.

And that’s why customers are the fifth, not first, point on The Golden Thread. All the previous points on The Golden Thread must be properly used to create customers — engaged ones, anyway. It’s complex, difficult and intensive.

But it’s also a clear path. The way to a customer’s heart and wallet is by being yourself — and different from every place else — with a consistent, emotionally engaging experience at every single location, on every single channel, every single day, for every single customer.

A fit made in heaven

Gallup’s research suggests that the traditional reliance on experience, education, and skills or competencies is a grossly inadequate and often misleading way of building your best team. Instead, we believe the degree of fit can best be determined by examining these five areas:

Motivation

How strong is your salespeople’s motivation, and what specifically motivates them to strive, to win, and to achieve? A certain restlessness — sometimes obvious and sometimes not — propels individuals who are high in motivation to ever-higher levels of productivity, mastery, service and excellence.

Influence

Do your salespeople consistently overcome obstacles and close sales? With the force of conviction and the power of persuasion, a sales representative with high influence talent inspires others to move toward desired goals sooner rather than later. Resistance is squarely met and overcome. These individuals counter arguments with reason and communicate confidently with customers in a manner that is concise, clear, and to the point.

Work style

Does your sales team demonstrate the ability to set goals, devise plans, attend to details, meet deadlines, and organize materials? All of these tasks define a team’s work style. Individuals with the desired work style characteristics handle multiple tasks with ease and know when to delegate assignments to others. They automatically see what needs to be done and do it. They thrive in a busy, productive atmosphere. Work is a source of satisfaction and pleasure for them.

Relationship

What relationship patterns are most successful with your customers? In the give and take of human relationships, the best salespeople strive to gain a keen understanding of who their customers are on both a professional and personal level. In many encounters, trust is established and nurtured, understanding is ensured, and loyalty is strengthened. Appreciation enhances cooperation, cooperation enhances teamwork, and teamwork enhances the quality and quantity of outcomes.

Thought process

Do your salespeople exhibit a thought process that enables them to achieve sales objectives? Decision making, problem-solving, creativity, and innovation grow out of a great salesperson’s thought processes. The correct balance of divergent and convergent thinking leads to the generation of options, alternatives, and solutions and allows for the identification of patterns, trends, possibilities, and potential problems.

Rally the Troops It’s easy for sales managers to base their team’s success on revenue earned. But is this the best approach?

How do sales teams measure success? The majority of sales managers and leaders base their replies on one indicator: revenue generated. When we are in such challenging times, is revenue — as a quantifier of success — far too one-dimensional? Looking at how reliable this one metric predicts success, we have found that revenue alone cannot tell the sales leaders of the organization about long-term sustainability or the ability to improve team performance.

Hiring more experienced salespeople does not necessarily improve the sales force over the long term.

Talent hunting

Research by Gallup with about 250,000 sales representatives in about two dozen industries shows that sales is primarily a talent-driven occupation. We define a talent as a “naturally recurring pattern of thought, feeling, or behavior that can be productively applied.” Think about a salesperson’s inability or unwillingness to hear the word “no” or the thickness of skin required to keep going in the face of rejection. These talents and similar innate tendencies — which are extremely difficult or even impossible to teach — are exceptionally powerful in great salespeople.

So this is where senior management comes in. The surest path to success in a sales organization is to find people whose talents naturally position them for success. In other words, hire new players whose talent profiles match those of your “A” players.

Experience is not the silver bullet

Why is it so important to instill this concept in senior management? Because this approach differs from the conventional approach of improving the effectiveness of a sales team by either hiring salespeople with more experience or providing more training to your current team.

Beyond a short learning curve, Gallup’s research shows little correlation between experience and sales productivity. Hiring more experienced salespeople does not necessarily improve the sales force over the long term. Similarly, providing additional sales training has a limited, short-lived impact. Research shows that salespeople in the bottom 50% of most sales forces will benefit little from additional training.

Improving the talent base of your organization, however, does result in substantial increases in the effectiveness and productivity of your sales organization. Over the past 30 years, Gallup’s researchers have identified a way to quantify the talents that characterize your top sales producers and to measure the presence of those talents in your potential salespeople. Through a number of studies over many years, we found that a better talent fit directly correlates to increased sales productivity.

Where to begin

So where do you begin to build a world-class sales force? Our experience suggests that you should follow a simple path:

Step 1: Hire more people who will naturally behave like your best producers.

Build a recruiting and hiring system that will attract and identify such people. If you already have a recruiting and hiring system, analyze it to determine if the selection assessments are predictive of future success.

Step 2: Identify and develop each salesperson’s unique strengths.

A strengths development intervention will lead to improved talent retention, productivity, profitability, and customer engagement. Examine your current professional development programs to determine if you provide the proper tools to help your salespeople optimize their performance by making the most of their dominant strengths.

Step 3: Build a great workplace.

Ensure that your managers are contributing to the productivity, retention, and growth of sales performers. Measure your sales managers on the strength of the engaged workplaces they build and maintain. If you are measuring engagement, look at your metrics to determine if they measure factors that managers can influence and if they link to business performance outcomes.

Step 4: Make sure you are customer-focused.

You might be doing things right with your sales force, but are you doing the right things to turn your customers into loyal advocates? Measure your account teams on their ability to emotionally engage and retain customers for long-term, sustained success.

Tough love

Gallup’s analysis reveals that 30% of sales teams can be significantly lacking in the required talents to be successful in your organization. This doesn’t mean that they are not working hard or that they aren’t dedicated to the company. What it does mean is that they are not right for sales — at least not in your organization. So, by ensuring that the people you hire are the best fit for your organization, you are safeguarding yourself against tough decisions and poor performance in the future. That’s an investment worth making.

What Top Salespeople Do Differently Superstars adopt a selling style that takes full advantage of their greatest talents

This so true. When I work with organizations this is one of the key elements that we look at with salespeople.

Read the following statement and ask yourself how strongly you agree with it: “At work, I get to do what I do best every day.” To what extent are you able to answer with an emphatic yes?

Gallup researchers have asked hundreds of thousands of questions over the years in an effort to understand what drives exceptional performance. We have found that a person’s response to the previous statement is one of the single most important questions we have ever posed. In just the past few years we have asked for responses from more than two million people. What did we find?

People’s responses to that question link directly to their productivity, profitability, and customer loyalty measures. The more people agree with the statement, the better their performance. The implications of this finding are both simple and complex.

Just doing more of what you do best can dramatically improve your performance. That’s the simple part. The more complex part is finding out how to do that in your present role, or finding another role that allows you to do that. . . .

All of us have to be in the right role in order for our talents to shine. That’s what we mean by fit, a close match between our job and our greatest talents.

Years ago, long before we began asking the previous question, we were struck by the observation that in every organization we studied, the best salespeople appeared to be in exactly the right jobs for them, and they usually knew it. When we interviewed top salespeople, they often mentioned this to us within the first few minutes of our conversations.

John told us his story. “After college I didn’t know what I wanted to do. No job seemed really interesting to me. Then almost on a lark I tried door-to-door sales. To my surprise, I liked it. I got a kick out of persuading people to buy. But I didn’t like the company much. After a while I was able to get a ‘real’ sales job with a legitimate company. I did okay, but the job required me to call on the same customers over and over again. You had to be careful not to push people too much or they would stop doing business with your company. I actually missed the closing pressure of my old job. Finally, after several different sales jobs I found one that was perfect for me. It’s fast-paced, you go all out to get the order, and I love it.” John has fit . . . and he knows it. . . .

For salespeople . . . [fit] means adopting a sales style that takes advantage of your greatest talents, or if you are changing jobs, finding one that is as close a match as possible to your talents.

Bear in mind that even modest improvements in fit yield big improvements in performance. This is especially true for individuals who are good performers already. Improving fit is the fastest, surest, and most dramatic way to improve your success and your job satisfaction.