Engage Employees By Actually Listening To Them

Jim Smith, Enterprise Management Group CEO, says employee engagement is possible if you actually listen to employees.
Jim Smith, Enterprise Management Group CEO, says employee engagement is possible if you actually listen to employees.

A CEO sponsors a ten-week employee engagement initiative, employees deliver a sustainable $300 million SG&A reduction, $200 million capital reduction, and a $45 million inventory reduction.

This isn’t just a made up fantasy, it’s reality for those willing to try something new. Article after article on the failure of employee engagement initiatives cites lack of leadership, but none go on to explain what CEOs should be doing. Moreover, there are few studies that claim an initiative impacted the financials. There are no marketing-driven whitepapers hyping a company’s employee engagement initiative, which is something you’d expect.

Engaging employees does work if done properly. What follows is an example of what can be accomplished when the CEO asks employees for their help and is provided with a process to suspend the negative effects of culture, politics, and silos.

An example of what this approach can deliver.  A Fortune 200 company completed a yearlong expense reduction which delivered $24 million in reduced costs, far short of their goal.  They turned to outside help after this failure.

“Employees are the best consultants you’ll ever find, if you can get them beyond both the real and perceived roadblocks.”

The selected third party provided a specific set of procedures for the CEO to follow. The CEO asked the employees for help with expense reduction posting only a single question. Now this question requires a bit of humility on the part of the CEO, but the employees, shocked by the question will jump onboard immediately.  What was the question?  Think: “What are we doing wrong”?

The third party, reporting to the CEO, gathered the data and took each suggestion to the responsible manager. In order for the suggestion to be rejected, the supervisor, manager, director or even officer had to present a better reason to keep the expense than the employee’s reason to cut the expense.  Approved suggestion were implemented that same day whenever possible.  With each announced engagement in the process grew, in this case eventually reaching twelve thousand [employee suggestions].

If it sounds too simple, well it is simple and that’s why it works, but it is certainly not easy. For decades management has been trained to SELL their spending.  In this case, they are trained to SELL the CEO on their resourcefulness to manage in light of their proposed reductions. This is quite a change in thought process, extremely effective, and a great opportunity for managers to demonstrate their skills in front of the CEO. At the conclusion of the ten weeks, a new business plan reflecting the changes was complete.

In addition to the results mentioned above, hundreds of policies were killed or altered and previously announced FEDERAL WARN ACT layoffs were reduced by 1800. All of this from employees whose only incentive was seeing their ideas turned into action, nearly every day. Since employees know the company, previously unobserved risks were disclosed., some serious.

There’s nothing more stressful for employees than an expense reduction initiative with the threat of layoffs hanging over their heads for months or even a year. Ten weeks passes quickly.  In the case mentioned above, they achieved reductions of $90 million by the sixth week.  Employees are the best consultants you’ll ever find, if you can get them beyond both the real and perceived roadblocks.

Read more: Employee Engagement: One of 11 CEO Leadership Qualities

Jim Smith has nearly forty years professional management experience. For the past fifteen years Jim has served as the CEO and principal owner of Enterprise Management Group, a management consulting company specializing in corporate wide expense reduction. Previously, Jim has served as consulting Chief Information Officer for Onvia.com, for Marsh & McLennan’s Seabury & Smith subsidiary, and for Puget Sound Energy. Prior to the Seabury assignment Jim created the Enterprise Project Management organization for The Principal Financial Group. Prior to this, he was the consulting CIO at Micron Electronics and before that, CIO during the merger of Northern States Power (NSP) and Wisconsin Energy Company (WEC).