Productive energy: Key to profits

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When the workforce of 800 in a plant of a large technology company was asked what percentage of their productive energy they were giving to this company, their answer was 25 percent. “Productive energy” is a way of measuring how much the workforce is giving to the employer in terms of their commitment to the company, their pride, willingness to go the extra mile, to innovate, create, and take risks. The national average is 30 percent, and lower during hard economic times or restructuring. With an average annual compensation of $75,000, this meant that the company was losing up to $45 million in productive energy annually. The impact of this loss goes straight to the bottom line.

What if it were possible to double the productive energy of the workforce to 50 percent? The potential savings of $22.5 million would be more than significant. It could set in motion new growth, sustainable profitability, and enhanced competitive advantage.

The key to both short and long term profitability is for leadership to be able to tap into the productive energy of the workforce, so they’re saying “Thank heavens it’s Monday.” It’s possible. What we’ve learned from companies that have come to understand that their competitive advantage is tied to the productive energy of their workforce is that it takes two key elements:

Collaborative Leadership: We have entered a new era in leadership where interdependence and collaboration have replaced compliance and the heroic leader as the way to fully engage the workforce. Collaborative leaders are self-reflective, are committed to building an ownership culture, and are actively engaged in aligning their organizations from the customer to the front line around the business strategy.

An Ownership Culture: People take care of what they own — they don’t wash rented cars. People want to “own” their jobs. They want to win, contribute, and add value. They want to find meaning in what they spend a third of their lives doing. Collaborative teams provide the structure for ownership. Two-way communications ensure alignment from the front line to the top line of the business. Customer-centric strategies engage the workforce. Acknowledgement and celebration honor the spirit.

This is not rocket science. But it does take the foresight and insight of leadership to realize that the future of their businesses rests with their ability to tap into the productive energy of their people.

Edward M. Marshall is a senior partner for organizational leadership at the Center for Creative Leadership in Greensboro, N.C. He can be reached at marshalle@ccl.org, or 919-265-9616.