 FOR SERVICE BUSINESSES, PASSION BOOSTS PROFIT By Mike Schultz and John Doerr
We all have bad days. If you work at a product company and you have a bad day, the product is still just as good as it was yesterday. Products on shelves don't suffer negative consequences of employee bad moods and unproductive time at the office.
For service businesses, the reality is much different. David Maister, respected business academic and author, states, “A less than fully motivated work force is a competitive disadvantage for any business organization. For a professional firm, it's a death knell.”
And he's right. For people that work at service companies, if you have an unproductive day it shows up directly in your work. Because services are produced (by the service provider) and consumed (by the client) simultaneously, there's simply no masking poor service delivery. Add up enough bad days and you can say goodbye to both your loyal clients and your new business development energy and success.
Now I know what you're thinking, ‘This may be true, but the people in my firm are passionate about their work, their clients, developing businesses, and their careers.' While this may be true, the odds are against it.
Consider the following research done recently at the Gallup organization: - 26% of the U.S. working population is actively engaged in their work (they're passionate)
- 55% is not engaged in their work (they're showing up, but passionless)
- 19% actively disengaged (they're unhappy and spreading discontent)
Maister says that ‘a less than fully motivated' staff is a death-knell. According to the Gallup research, 74% of work the U.S. working population is definitely less than fully motivated. Doing the math, that means that, on average, 74% of the people at your firm are likely less than fully motivated.
Even if you're much better than average and that number is 60%...50%...40%, it is probable you are losing a significant amount of firm competitiveness because of people at your company who are not giving 100% most days.
Service Businesses and Passion – An Approach
If you believe that increasing the passion levels at your organization could be a benefit to firm growth, profitability, and competitiveness, begin the process of increasing passion by answering the following four questions:
- What difference will it make?
Indeed, if I can increase the ‘passion index' at my organization, what kind of results can I expect for the efforts? For example, do I believe that I can increase my business development energy by 10%...my staff billability by 5%...innovation and new service development by 14%? And if so, how will all this lead to better growth and profitability? (Note: The Gallup research also revealed that organizations with the top 25% of ‘engaged workforces' are 27% more likely to report higher profitability.)
- How can I measure passion at my organization?
While service organizations have many shared characteristics, no two organizations are exactly alike. Thus you must carefully consider both the process of measurement, and the factors of measurement, that will be most important and effective at your firm.
- What changes can I effect?
Even CEOs are not all powerful. Many service organizations have ownership structures (like partnerships) that make implementing organizational change particularly challenging. You should know what, if anything, is off the table before you engage any passion improvement initiatives.
For example:
- Can you change compensation plans?
- Can you change people's roles and responsibilities?
- Can you change hiring practices?
- Can you affect how managers supervise their staff and teams?
- Can you sustain an effort over the long-term?
- What are my critical success factors? What can derail my efforts?
Know also, before going in, your critical success factors and what might derail your efforts once you get started. Many projects, for example, need senior management support to succeed. Major change such as this needs even more active senior management dedication than an every-day organizational initiative.
This is both a critical success factor and a potential derailer. Efforts such as these will necessitate changes in how groups of people at your firm go about their days and routines. Eliciting (or mandating) behavioral change in employees is never a simple task. Make sure you consider all factors and conditions necessary for success.
There is no doubt that passionate and engaged service businesses are more successful than ho-hum service vendors. And there is also no doubt that senior management can directly measure and improve the passion levels at their firms. Getting it right can dramatically improve firm passion, staff innovation and productivity, revenue growth, and overall profitability. |
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