Tuesday, 30 April 2013
Putting your People First
The other day I heard the former chief executive of the bakery chain Greggs on the radio talking about executive pay as well as other current issues. One of the things he discussed was their staff profit share scheme, and how every year a certain amount of Gregg’s profits were shared amongst the staff. He said that in his view Greggs always put their people first. He was challenged about this by the radio presenter who said ‘surely you mean you put the customer first’, he replied no, people first, motivated staff mean happy customers. This led me to think of the adage ‘the 3P’s’, which stand for: People before Product (or service) before Profit (or performance). The sequence and the word before each P are extremely significant. In other words, if you ensure your that your people are capable, creative and engaged, they will in turn produce great products (or services), which will lead to a successful, high performing and ultimately profitable business. While I have never worked for Greggs and don’t know what they do to ‘put their people first’, I have seen and worked for businesses who got it wrong. They engaged in too much ‘top down’ thinking. They strived for profit and performance without even thinking about whether they had the right people engaged in doing the right things. We have all seen businesses pay huge salaries and big bonuses to focus staff on what needs to be achieved (e.g. sales and profit), and while bonuses may act as an ‘extrinsic motivator’, in reality they only provide a short term effect, they do not truly engage staff and are soon forgotten. Indeed recent research suggests that paying large bonuses for achieving specific goals may reduce performance as it can undermine our intrinsic motivation to achieve. So what does putting your People before Product and Profit mean? I believe that if a business is going to truly put their people first they have to do a number of things. For example, they need to: Be clear about what the purpose of the organisation or business is. Understand the innate skills and capabilities of the people they have. Support their managers and staff to develop skills that will make them more effective in their jobs. Trust their people to do their job and give them the freedom to make their own decisions (within guidelines). Involve their staff in decisions that affect them more. Listen and pay attention to what their staff say, their concerns, and ideas for improvement, and ACT on them. Respond flexibly to the needs of their staff. Pay people the ‘going rate’ for their work In addition, they need to recognise and understand that the culture of the business is dictated by the behaviour of its leaders and managers. The business must therefore work hard to support their leaders and managers to develop the necessary behaviours to enable them to act as excellent role models, and demonstrate on a day to day basis that they put their people first. If a business truly desires to improve its performance, it must start with its people, their skills, capabilities, motivation and level of engagement.