How Does This Place Make Money? Part One

That’s the question I have challenged employers to ask their people for years. Sadly, most people can’t provide an answer that demonstrates they really understand the business model of the firm for which they work. Generally, they’ll say something like, “We sell software,” or “We deliver stuff to restaurants.” If you ask them to drill down on that and provide more detail, most will give you a blank stare. Why? Because of silos. In other words, they can only explain how the processes work within their particular part of the company. Ask someone in accounts payable how checks are cut and they can explain the 17 steps. Ask someone in the warehouse how trucks are loaded, and they’ll give you a short dissertation on all the details. But ask them about the overall business model and they’ll shrug their shoulders. In some cases, the person will say, “That’s not really my job.” But it is! Here are three reasons why:

  • It engenders pride. A while ago, I spoke to an all hands meeting for Rasmussen Group, a large heavy construction company. These are the people who build roads, bridges and the other components of infrastructure upon which we all rely. Talk about silos! With the exception of the engineers and project superintendents, most employees spend their days moving earth, operating cranes and other mostly isolated tasks. So, every couple of years, the firm’s leadership brings everyone together for an expenses-paid weekend to provide information about the company, offer a bit of training and allow them to socialize. This past year, everyone was shown a twenty-minute video illustrating how all the components for a large project came together. It featured those in the room doing their jobs on these enormous pieces of equipment. What fun it was! Everybody in the room was laughing and pointing and teasing each other when they appeared on the screen. Ask most heavy equipment operators what they do and they’ll say something like, “I drive a tractor.” Ask a Rasmussen operator and he’s more likely to say, I help build bridges.”
  • It engenders better daily decisions. When you are proud of what you do, you take more ownership in the outcome. That means you think about the bigger picture – how your decisions affect others and how theirs affect yours and how all decisions impact the final product. You can’t help but make better decisions when you’re invested in the outcome. Does this sometimes engender disagreements about the best way to proceed? Yes, but that’s a good thing because it demonstrates that people care. So as long as they are productive, let’s have more disagreements. They will produce better decisions.
  • This results in loyalty and retention. It’s been said that employee loyalty is a thing of the past – that most employees see their jobs as contracts. Not when they believe in what they do and believe that what they do is making a contribution. When they’re making good decisions and seeing the direct results of their efforts, employees, regardless of age, will remain on the job and continue to hone their skills. The costs of turnover can devastate a company’s bottom line.

Simply answering the question, “How does this place make money?” begins the effort of building pride, compelling better decisions, and boosting retention. How? I’ll share some strategies for that in the next post.

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