Here we feature a short excerpt from new start-up Elev-8 Performance’s latest white paper.
‘We are in unprecedented times.’
That is the declaration that I have heard over and over for several months now- and it is usually the start of an announcement about cutbacks, site closures and redundancies. In many aspects, we are in unprecedented times. The complete change to social relationships and economic situations has turned the world upside down since March 2020.
But in some ways, we have been here many times over the years.
Economic downturns have happened cyclically throughout history for a variety of reasons. Every decade, we witness significant events that affect our economy – including the recent 2008 global banking crisis that we now know as the ‘credit crunch’.
In economic terms, the simple equation business leaders must always have in their mind relates to ‘supply vs demand’. In essence, the question to answer is ‘can we make more money than we spend?’
Do you view your people as an asset or a cost? Your response is critical for your long-term commercial success.
This simple equation is the basis of many board discussions every day in every private, public and third sector organisation globally. Estimates show that 80% of business-market value is now accounted for by ‘off – balance sheet’ assets. What this means is that most of a business’s value lies in its human capital or, in plain English, its people.
The pertinent question is: do you view your people as an asset or a cost? Your response is critical for your long-term commercial success.
On 3 August, 2020, I officially became a co-founder and business owner of a startup along with seven friends. It’s a first for me – and was an exciting decision that I didn’t take lightly. With eyes wide open, we knew that we might need to answer the ‘demand vs supply’ question – aware that one day, demand for our services might also stop.
Whilst we cannot control when our customers stop buying, what we can do is three things:
- Optimise performance. Maximise the revenue in our business by supporting each other to achieve optimum performance. Over the past twenty years, we have worked with FTSE250 organisations. We’ve spotted the opportunities in their performance data that means they can leverage performance in a different way, which in turn leads to significant commercial benefits.
- Innovate. We have tapped into the experience and knowledge garnered through working with our clients. Doing this means we can continually evolve, change, adapt and grow to meet demand and reflect changes in the customer and business landscape. It’s no coincidence that when you type ‘innovation culture’ into Google, you find multiple articles from Mckinsey, Harvard, KPMG, Accenture et al. on how creating a culture where people want to show up, leads to employees (not leaders) continually pushing the organisation forward. Google once reported that it creates more customer solutions from its employee ‘innovation day’ once a month than the remaining days in the month! ‘Innovation day’ was set up to allow employees an opportunity to work on any (work-related) project they choose. According to Dan Pink, mastery is one of the biggest motivators available to us. And Google has tapped into this brilliantly.
- Create the right climate. Creating a culture characterised by low attrition, high discretionary effort, optimised working conditions and innovation. We choose to treat our people as a family- sharing our successes (as well as any pains) collectively. A group of UK researchers have provided the first scientifically-controlled evidence of the link between happiness and productivity. The study found that ‘happy people’ are about 12% more productive than ‘unhappy people’. A business that promotes employee happiness, through creating the right climate, means lower turnover and better company performance. Employees are loyal, customers are happier, and companies perform better.
I can honestly say that in our business, we will focus on and prioritise these principles because we know that it’s the right thing to do. They are the foundations from which we will achieve commercial success.
Many organisations follow these principles, and we have worked with some great ones over the years. Some, however, treat people as a number in a cost centre, and in troubled times take that cost out of the business to fix short term commercial goals. If you are wondering who these organisations are, turn on the news today and see if you can work it out.
About the author
Lee Jones is sales director of Elev-8.