Competition is fierce in consumer packaged goods (CPG), the industry sector that includes food and beverages, footwear and apparel, tobacco, and cleaning products (things that get used by consumers and replaced rather frequently). Product innovation is constant, space on store shelves is limited, and brand awareness is paramount. Even in a good economy, business in CPG can be tough sledding, and 2008 wasn’t one of the good years – a struggling economy and depressed consumer spending led to a decrease in median shareholder returns of 25% for consumer packaged goods companies.
In the midst of this carnage, Campbell’s (makers of several household brands, notably Campbell’s Soup) turned in a surprising 7% increase in net earnings per share in FY 2008. In fact, beginning the second year after Douglas Conant became CEO of Campbell’s in 2001, the company has marched steadily ahead – from $6.13 billion in revenue in 2002 to $8 billion in 2008.
In a February 2010 interview with Gallup Management Journal, Conant discussed the steps he took to get the company moving – a process that took about eighteen months and included the replacement of 300 (of 350) top managers.
I strongly believe that you can’t win in the marketplace unless you win first in the workplace. If you don’t have a winning culture inside, it’s hard to compete in the very tough world outside… You can’t ask employees to achieve extraordinary results if they’re not fully engaged. That’s why we focus a great deal on getting the workplace right so that people are engaged and proactive – so that people are moving forward arm in arm and competing with a spring in their step. As they become more engaged, they find ways to win in the marketplace that are sustainable.
Conant has seized on a crucial and profound principle in business: employee satisfaction and customer satisfaction are directly linked. In fact, it is fair to say that your customer’s satisfaction in the marketplace will rise and fall with your employee’s satisfaction in the workplace. Sure, I know this seems somewhat obvious (or completely obvious), but it is still the rare company that invests in leadership training for those managers who are responsible for employee job satisfaction.
Workplace Development
Training for managers? Why not training for the disgruntled employee? Actually, that is the first thought at most companies. So, perhaps knowing where the problem lies is the real challenge. When employees become disenchanted in the workplace, according to Leigh Branham, most of the time the issue is an ineffective manager. In his book The 7 Hidden Reasons Employees Leave, Branham dissected the responses of 19,700 employees who left their jobs and discovered that 70 percent left their positions for reasons directly attributable to their immediate supervisor or manager.
However, disgruntled employees rarely leads to management training. Instead, companies install casual dress Fridays, monthly birthday parties, and any number of other feel-good ideas. Don’t misunderstand, there is nothing wrong with any of those things per se; they just won’t make the problem of poor leadership go away. That’s the real challenge.
Employee engagement (employee job satisfaction) is a measure of how much an employee feels connected to the company. Are they bought in? Do they enjoy work? Do they trust the boss? Are they passionate about doing their best work? Research clearly shows that all of these things – and many more – are directly impacted by an employee’s direct manager or supervisor. Unfortunately, that manager or supervisor is rarely trained to function as a leader – to develop people, to communicate effectively, to inspire and engage. Instead, bright and capable employees are promoted to management simply because they are…well, bright and capable. They get things done. They take responsibility. They make things happen.
As managers (or supervisors), however, they come face-to-face with the brutal fact that the toughest part of their new job is dealing with the employees. Without any preparation or training for the position, they are left to figure things out for themselves, which creates frustration for both managers and employees.
Here’s an example: Ask any manager if they have ever been trained to create trust with their employees. It is likely that they have not, but look at Conant’s observation about the importance of creating trust with employees:
“…once you earn people’s trust, you have permission to do some amazing things. Trust gives you the permission to give people direction, get everyone aligned, and give them the energy to go get the job done. Trust enables you to execute with excellence and produce extraordinary results. As you execute with excellence and deliver on your commitments, trust becomes easier to inspire, creating a flywheel of performance.”
Conant observes that trust is a critical part of workplace performance. As a manager, then, it is critical to understand that marketplace performance ultimately is a function of trust. Trust leads to workplace engagement and engaged employees create satisfied customers. Starbucks CEO Howard Shultz made this point years ago when he said, “You can’t expect your employees to exceed the expectations of your customers if you don’t exceed the employees’ expectations of management.”
To win in the marketplace, it is essential to win first in the workplace.
{ 0 comments }
Twitter
LinkedIn
