When will we understand?

I conducted an informal survey and found that most managers do not understand what their most important function is at work. Most managers feel that their most important function is to provide revenue, reduce costs or maintain margins. They do not realize that those things come from the results being produced by the organization through its people and processes not through anything else. Those metrics usually reflect the effectiveness of the organization.

So what makes an organization effective? Plain and simple; when a company focuses on it’s people and there is enhanced performance and improved productivity. In an article that I recently read, it was noted that in the software development industry, turnover rates approached 20%. Yet one company is that industry exhibited less than a 5% turnover! Imagine the savings to the company in terms of time saved in recruiting, training, and just plain managing.

We continue to find that middle management is most important ingredient to preserve good to great employees. First, an employee’s boss is the company to them and they will leave if they don’t receive positive feedback from the boss. Secondly, positive feedback must be timely. Most managers don’t realize that their role must be focused on their people and their performance is a direct reflection of their people’s success. People need to be engaged and if they aren’t engaged, they move on to another job. People will not stay in a job where engagement is not fulfilled, period. So what are you doing about it?

Your primary role as a manager is the development of your people. The CEO, President, HR Professional, and any decision maker in the company must realize that management training is the most important ingredient they can provide because the managers’ tasks revolve around making sure their people are well served and they understand the value of their work. If you don’t have an engaged workforce, then you have a workforce with their eyes on the door. Most managers do not exhibit good interpersonal skills with their staff but companies still are not responding to their training needs.

Please forward this article to back up the need for training.

Why. . .Why. . .Why? The Need to Understand.

By Richard Hohmann

At the most basic level of alignment, companies must make sure that employees understand how the company makes money. Employees need to understand the basic financial facts about not only how the company makes money but how revenue drives profitability, and how cash flow can inhibit growth or how cost reduction can impact success.

Since mid-level managers are the ones left holding the bag in terms of communicating with the workforce and we better make sure that our managers have a high level of business acumen so that the employees can have confidence that the decision making process is based on something more than a gut feeling. Understanding the financial thread that ties everything together in the company better not only be understood but communicated to the employee. The engaged employee wants to know why. Why did we decide to do that, why did we layoff people in our most productive department, why aren’t we advertising in the Wall Street Journal? People want to understand and the best way to get them to understand is to talk the talk – business acumen.

Workers just might start to understand how difficult it is to be successful in reducing costs when healthcare costs have risen in double digits for the past five years, fuel costs have doubled, and fortunately have come back down to a reasonable rate. People need to understand that their performance in their role directly affects the success of the company.

Let’s start talking to and training our Middle Management and employees about Business Acumen, Decision Making, Problem Solving, and basic finances. Provide a real foundation for not only communication, but for action plans and for people development that leads to organizational effectiveness.

It is really getting rough out there and you need to keep your key employees informed. Your employees count on leadership to be the visionary and they want to know what you see as well as what they are reading in the newspaper or hearing on the TV. Now is the time to communicate that the strengths of your people make the difference in organizational effectiveness. We all need to improve our skill-sets and competencies when times get rough but we must understand why we need to do that.