How Much Poor Employee Interactions Are Costing You Financially? – Residue Calculation
Once upon a time, a very strong woodcutter asked for a job in a timber merchant and he got it. The pay was really good and so was the work condition. For those reasons, the woodcutter was determined to do his best.
His boss gave him an axe and showed him the area where he supposed to work.
The first day, the woodcutter brought 18 trees.
“Congratulations,” the boss said. “Go on that way!”
Very motivated by the boss words, the woodcutter tried harder the next day, but he could only bring 15 trees. The third day he tried even harder, but he could only bring 10 trees. Day after day he was bringing less and less trees.
“I must be losing my strength”, the woodcutter thought. He went to the boss and apologized, saying that he could not understand what was going on.
“When was the last time you sharpened your axe?” the boss asked.
“Sharpen? I had no time to sharpen my axe. I have been too busy trying to cut trees…”
I share this story to illustrate how sometimes we are too busy to see the wood for the trees. We are too busy to spot opportunities and we are too busy to identify real problems.
Papering Over the Cracks
7 out of 8 digital transformations fail!
This costs a staggering $900 billion.
Organizations are built on a balance of two essential ingredients.
The Mechanics of the business are the processes, procedures and strategies. They are the working parts that make the machine function.
The Humanics of the business are the interactions needed to make the mechinics run smoothly.
These daily interactions are the lubricant that make the machine run smoothly. When interactions don’t go so well, it is like sand or grit get into the machine and it stops working well and in some cases grinds to a halt.
When such problems arise leaders rush to fix that which is easier to work with – the mechanics. It is imminently easier to create a new policy or procedure than to deal with the human(ics) side of the business.
This is on reason we see so many business transformations fail. The intervention is often in the wrong place. Often organizations spend a fortune on shiny new initiatives, a new CRM, a new video conferencing tool or the digitization of broken business models (as my colleague calls it Lipstick on a Pig initiatives).
We are often so busy doing things that we don’t step back and question are we doing the right things.
This is where we have to pause, zoom up in a helicopter and decide do we sharpen the saw, do we need a need tool, do we need to train the woodcutter or perhaps even cut them loose.
With GreenLine, we have worked with 1,000’s of clients to enhance the humanics of their organizations. Through this work we have quantified how much poor interactions, within the company and externally to suppliers, project managers and even customers can cost you.
Below we share the formula to estimate the cost of residue in your company.
Here is what this looks like in financial costs. We always ask our clients how many hours per week they spend cleaning up residue. The Global average time managing residue per week is 9-12 hours (in some businesses some managers spend up to 40 hours per week managing residue).
In the example below, I use the average hourly salary of €18.45 in Ireland for Q1 2018 as estimated by the central statistics organization.
I use 48 work weeks per year.
Finally, I use the figure of 600 employees to illustrate the cost.
This is a staggering figure. When managers see this number they always need to check it for themselves. Bear in mind, we have used the lower end numbers here. Also, more important, think how this time is spent managing residue that does not bring your business forward, at best it keeps it standing still.
Every hour spent dealing with residue is an hour NOT spent driving your business forward.
Don’t be too busy to sharpen the organizational or leadership saw.
If you would like us to assess your residue, get in touch, we would be delighted to hear from you.
Thank you for reading, if you like this please hit a thumbs up so others might see it.
The GreenLine purpose is to change how people approach conversations in a way that gets things done more efficiently, saving time, money, effort, resources and heartache, whilst building trust and emotional intelligence (EI). Aligned with key organizational issues such as the performance reviews, high performing and agile teams, GreenLine focuses on the ‘humanics’, the individual human interactions that act as the currency to drive real and lasting performance improvement.