A couple for friends of mine came out with an automotive bailout plan that is far superior to anything the Detroit automotive companies or the Congress have come up with.  Let me know what you think.

In 1927, three Harvard professors conducted research at a Western Electric plant in an attempt to find out what caused employee productivity.  They found that the simple act of paying positive attention to employees had the dominant impact on productivity.  Today, 80 years later, researchers are still finding that the vast majority of employees are unhappy in their jobs because their management doesn’t care about them or notice what they do.  This leads to low productivity and high turnover.  Their sentiment goes something like this: ”Why work hard or stick around if nobody cares?”  At the same time, executives and managers, almost across the board, are saying that low productivity and high turnover are their biggest problems.  Hello!  What’s there not to get?  Start caring about your employees instead of trying to exploit them and these problems will turn around immediately! - Ross / RossReck.com

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The biggest executive lie in the world goes something like this: “Our people are our most important resource.”  A study quoted in The Invisible Employee by Adrian Gostick and Chester Elton found that 90 percent of the executives surveyed said that people were their company’s greatest asset.  Then, given the chance to rank strategies that were most likely to bring success to their company, they put people issues near the bottom.  It’s a very simple formula: If the executives don’t care about their people, then their people don’t care either.  This lack of caring takes a tremendous toll on the bottom line in the form of increased employee turnover, absentisim and theft as well as reduced productivity, customer loyality and sales.  The good news is that this entire problem could be fixed if executives took seriously the fact that their employees really are their most important resource and simply acted accordingly. – Ross / RossReck.com

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In 1968, I was a senior at Michigan State University.  At the time, GM, Ford and Chrysler were counted among the pillars of the American economy and they owned the domestic auto market.  Also at that time, Honda made small motorcycles.  Recently, I came across the set of note cards for a Business Policy class I took that year.  On one of the cards was a quote from a February, 1968 issue of The Wall Street Journal.  The quote read:  “Domestic automobile sales down; foreign automobile sales up.  Japan could be big player someday.”  Well, it’s forty years later and “someday” is definitely here; in fact, it’s been here for a long time.  Whoever wrote that article had incredible insight.  It should have served as a wake-up call to the American Auto industry.  Instead, it produced only belly laughs.  As a result, what we used to refer to as the “Big Three Auto Makers” are now on the verge of collapse–all because they failed to take advantage of this very early waning.  Let’s hope other American businesses can learn from their mistakes. – Ross / RossReck.com

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I see where GM and Chrysler are seriously talking about merging.  The two companies are saying that if they didn’t merge, there’s a good chance that one or both of the companies will fail.  On the other hand, the logic goes that if they merged the combined company would control 36 percent of the US auto market which would prevent it from failing.  As David Cole, chairman of the Center for Automotive Research, put it: “If they (the two companies) do come together, they really do become too big to fail.”  Now, I’ve heard everything!  Since when does combining two large companies, that are both incompetently managed, guarantee success?  At one point, GM controlled more than 36 percent of the US auto market and today it’s in danger of failing.  Unless new senior management is brought in that knows what it’s doing with regard to designing, building and marketing cars, this merger only prolongs the agony, it doesn’t prevent failure. – Ross / RossReck.com

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            It’s a long held belief that the immediate boss has the most influence over how much discretionary effort an employee is willing to apply toward his or her job.  Towers Perrin, in their Global Workforce Study which included nearly 90,000 workers from 18 countries, found this not to be true.  The study found that while the impact of the immediate boss was large, the top single driver of discretionary effort is “senior management’s sincere interest in employee well being.”  In other words, does senior management consistently demonstrate that it truly cares about front line employees?  The study goes on to say: “Senior managers now know that it is not enough for them to observe the significance of employee engagement (willingness to apply discretionary effort) from afar and then task their HR and line managers to do something about it.  They themselves represent part of the problem, and a major part of the solution.”  The study indicates that senior management could significantly increase levels of employee discretionary effort “…by doing a few simple things sincerely, consistently and well.  In order of importance the top three of these are: 

1. Communicate openly and honestly
2. Be visible and accessible
3. Show support for new ideas.”

           The study also points out that senior management’s function as role models for managers throughout the organization cannot be overestimated.  “Their interest in staff, even if demonstrated in small ways, will be carefully noted by others lower down the management structure.” – Ross / RossReck.com

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How many times have you heard people say something like, “If you’re nice, people will take advantage of you?”  Or, “If you’re nice, people will think you’re a pushover?”  Or, “Nice people finish last?”  People who say these things are totally out of touch with reality and haven’t bothered to check the facts.  Study after study has shown that people who are nice make more money, are healthier, get bigger pay raises and promotions and are far more successful as managers than people who aren’t.  What’s there not to get?  If you want to be a successful manager, it’s very important that you be nice. – Ross / RossReck.com

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A recent article in The Wall Street Journal pointed out how some progressive churches are hiring the services of a “mystery worshiper.”  Thomas Harrison, a former pastor, poses as a first time church attendee and, while he’s there, he covertly evaluates just about everything from the quality of the welcome, to the strength of the sermon, friendliness of the membership, cleanliness of the bathroom and condition of the church grounds.  He even critiques the greeting on the church’s voice mail.  Pastors say Mr. Harrison’s critiqies can be brutal–one report mentioned was 67 pages long–but they keep churches from slipping into complacency which prevents them from growing.  As one pastor put it, “My competition is Cracker Barrel restaurant down the street.  If they go there and are treated more like family than when they come to my church, then it’s lights out for me.”  Many businesses would serve themselves well if they had the courage to subject themselves to an honest crituque conduct by an outsider.  Don’t expect too many businesses to do this, because it does take courage–a trait many business leaders are especially short on. – Ross / RossReck.com

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According to a recent article in The Wall Street Journal, when a plant is temporarily shut down at GM, Ford or Chrysler, under terms of union contracts, workers receive most of their pay, but don’t have to show up.  On the other hand, at Toyota’s Princeton, Indiana and San Antonio, Texas plants, down time is used to put workers through a series of training sessions to improve their quality control and productivity skills and find better ways to assemble cars.  Jim Lentz, president of Toyota’s US sales unit, says, “It would have been crazy for us to lose people for 90 days and then rehire and retrain people and hope that we have a smooth ramp-up coming back in.”  This effective use of down time also sends employees at these Toyota plants a clear message that their company truly cares about them.  As one assembly worker put it, “One of the major things that everyone is grateful for is that they [the company] thought enough of us to keep us here.”  Talk about a novel idea!  Is it any wonder why Toyota is running circles around GM, Ford and Chrysler?- Ross / RossReck.com

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Wal-Mart has long been known as a very successful retailer.  It has also long been known as an employer that pays at the bottom of the barrel when it comes to employee wages and benefits.  As a result, the rates of employee theft and turnover are high at Wal-Mart–70% of the employees hired leave within a year.  Costco, on the other hand, pays its employees 42% more than Wal-Mart.  It also pays health care and other benefits to its employees that make other retailers look like Scrooge.  The payoff for doing this is that Costco has very low rates of employee theft and turnover.  Jim Sinegal, CEO of Costco says, “This is not being altruistic.  This is simply good business.”  Mr. Sinegal takes very good care of his employees and they take very good care of him by providing excellent customer service.  This sounds like a case of Wal-Mart being penny wise and pound foolish. – Ross / RossReck.com

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