The Best Invest in Their People

“The whole point of being alive is to evolve into the complete person you were intended to be.” – Oprah Winfrey

On a personal level, continuous improvement requires a growth mindset; people who believe that their qualities can be cultivated through effort over time. You will experience setbacks, but people with a growth mindset view these as indicators on where they can learn and improve, not a judgment about their capabilities. (Those with a fixed mindset view their capabilities as just that, fixed, either you have it or you don’t.)

The point is to stick with it, to continually learn and improve despite these setbacks – and in fact learn from those setbacks. As Mia Hamm once said, “After every game or practice, if you walk off the field knowing that you gave everything you had, you will always be a winner.”

At an organizational level continuous improvement is also a constant, gradual change. What leaders can’t do is reorganize a company into being a model of continuous improvement. Organizational structure doesn’t contribute to continuous learning, people do. Toyota didn’t succeed because of its organizational structures, and in fact it didn't succeed because it focused solely on improvement. Toyota succeeded because (as Mike Rother points out in the Toyota Kata) Toyota’s leaders focused on increasing the improvement capability of people.

Leaders with a growth mindset are concerned with the true development of the people and the organization – in ways that allow the organization to continue to flourish after he or she is gone. Companies and people aren’t viewed as simply vehicles for a leader’s greatness as those with a fixed mindset are prone to do; instead the entire focus is on the growth and development of the people, themselves, and the entire company as a whole.

This requires many leaders to shift their thinking. It isn’t just about getting more out of people. Yes, we need productivity, but the question is in how achieve it. There needs to be a cultural bias towards continuous improvement, where everyone is trained and expected to reject the status quo and look for new ways to improve. Using lean and agile thinking this means combining work tasks and moving away from batches and queues of work, for example.

The goal of lean and agile thinking is to create improvement and a winning situation all the way around. Productivity isn’t increased by laying off workers and demanding more from less people, which usually involves driving the existing system harder. By combining work, eliminating waste and harnessing the potential of autonomous teams, productivity is increased because the work is more rewarding.

It is more productive and rewarding because people own their work and they can see and understand how their work contributes to providing the customer with true value. They are more connected to the business and the output of the organization as whole.

The best companies motivate their employees in other ways. The underlying theme is the same, however. The best don’t focus exclusively on getting more out of people, they create an environment where people feel appreciated and valued. The best invest in their people – and in return they get highly motivated, dedicated, productive employees.

The SAS Institute is a great example. The company does a lot of things that say, “We appreciate and value you.” A gym, a seven-hour workday that ends at 5:00 PM, day care and unlimited sick days are among the benefits that the SAS Institute provides its employees. The work environment is warm, connected and relaxed.

The company gets a great deal in return for all of this. High productivity is one. But there are other benefits to the company, such as low turnover (it is never above 5%). This saves millions on recruiting, training, severance, and lost productivity as new people are brought on board.

Once upon a time I worked for a company that had a 7.5-hour workday (37.5 hours per week), a gym, subsidized lunches, day care and a great work environment, similar to what SAS offers. Culturally, we had high expectations of ourselves; we were expected to learn, improve and contribute. And in case you are wondering, the 37.5-hour work week wasn’t a productivity problem, either.

We were flexible. If we needed to put the time in to complete a project, we did. We didn’t mind. We worked longer when required, and it was a great to have a shorter work week as a matter of policy. You could recharge without feeling guilty about it. Productivity (and quality of the work produced) was excellent.

This type of work environment attracts great people, people who are internally motivated to be the best and incented to continually produce so that they can preserve great perks. I joined the company just out of college, and I can say that the standards were high, not from management as much as from my peers. Those who had worked in other companies understood how unique this situation was and wanted to preserve it, believe me.

It was a great place to work, and I heard people outside of the company often comment that we didn’t live in the real world. In retrospect, they were right. The company was always ranked in the top 100 companies to work for in the U.S. People enjoyed working there and enjoying giving their best.

Unfortunately, this company did manage to shoot itself in the foot. It didn’t fail, mind you. But morale, retention and productivity became major issues. How? The company went public, and little by little, the perks disappeared. The company eventually fell off the top 100 list and became no different than any other company. And it picked up many of the problems other companies that aren’t on that list have.