Q & A: Jack ZengerMeasuring Up Are your employees as productive as they can be?

Would you like to double your profits? Outrageous as that goalmight seem, there's a fast way for most businesses todramatically increase profitability: Just tweak workerproductivity. Little gains in productivity turn into big profitsfast, says Jack Zenger, chairman of Times Mirror Training Inc., theworld's largest group of employee training companies (amongthem: Zenger Miller and Learning International). "Increasingproductivity by only 5 percent can increase profits by 50percent," promises Zenger.

Here's how Zenger's arithmetic works: In most companies,costs associated with labor comprise half or more of totalexpenditures. "Assuming the business has a 5 percent return onsales, a 10 percent increase in productivity will doubleprofitability," says Zenger.

That's a realistic goal, too, because productivity in theUnited States has been flat for a quarter century. While expertsdebate why American productivity can't seem to overcome itsplateau, Zenger has no doubt that easy, cheap strategies cantranslate into higher productivity for your company.

The only hitch? To get the big productivity jumps, you must askyour workers how they can do their jobs better. "That may bethe big secret of improved productivity," says Zenger, authorof several books, including Not Just for CEOs (IrwinProfessional Publications). "Productivity is the mostimportant issue facing us today," he adds. "But there areways to get big gains, fast."

Entrepreneur:Why do you say productivity is the mostimportant issue our country faces?

Jack Zenger: For the nation, productivity gains have beenflat since 1970. If our productivity gain since 1970 had been ashigh as in the decades before, our standard of living would be 25percent better than it is. From a competitive point of view,America still is the most productive nation on earth. But there isreason for real concern about the United States' lag inproductivity gains--while other nations such as Japan havecontinued to enjoy productivity increases.

Entrepreneur:Just how poorly have we beenfaring?

Zenger: Prior to 1970, productivity increased by 2.8percent to 3.5 percent per year. But since 1970, we have averaged a1.2 percent annual productivity gain for the economy as a whole. Insome sectors, there have been significant gains--manufacturingproductivity has increased 3 percent to 3.5 percent for the pastfive years, for instance. But elsewhere--the service sector, forexample--there has been essentially no gain. And officeproductivity is actually down 2 percent.

Entrepreneur:Are there companies that can't raiseproductivity?

Zenger: No. And our experience is that the more anorganization focuses on improving productivity, the more gains itwill see.

Entrepreneur:A key productivity improvement idea youput forth is that we can measure how we do just about any task anduse those measures to enhance efficiency. Is that widelyaccepted?

Zenger: All the evidence shows one reason peoplearen't productive is that they don't know what'sexpected of them--they just don't know what winning on the jobmeans. But measures tell them how they are doing and let them seewhere and when they are improving.

Can any job be measured? Years ago, I worked at a largepharmaceutical company on developing measures that would helppeople know how well they were doing their jobs. We hadsuccessfully implemented a variety of measures, but when we came tothe [company's] research and development department, thoseexecutives told me there just was no way to measure theirperformance.

Finally, in exasperation, I said, "Fine. If you don'twant to help find ways to measure your performance, we won'tinclude you in our executive compensation plans." The R&Dpeople said, "Hold on. We can come up with measures." Andthey did.

The moral is: Measures can be developed for any job, and oncemeasures are established, usually we can also find ways to do thejobs better.

Entrepreneur:What's the key to a goodproductivity measure?

Zenger: What gets measured depends on the job. Don'tmeasure something just because it's easy to measure. That'slike looking for your watch where the light is instead of where youlost it. Aim for measures that will help produce real workplaceimprovements, and keep in mind that everything we do is a candidatefor cycle time reductions.

In one company, for instance, the time it took to repair circuitboards dropped from 11 days to five. That's what happens whenwe begin to measure the steps that collectively make up ourwork.

Entrepreneur:Who should develop performancemeasures?

Zenger: The people doing the jobs. I strongly believethis, for two reasons: They are closer to the actual activity thanmanagement is and, therefore, really know what to measure. Second,they feel a lot better about being measured when they have had avoice in selecting the measures rather than having measures imposedon them.

Entrepreneur:A tip you offer for boostingproductivity is to make a video of yourself throughout the workday.What's the benefit?

Zenger: Of course, this technique is taken from sports,but it has applications in many jobs. Most of us simply get used toour daily routine and stop noticing things that need improving; avideo can give us a fresh look at what we're doing.

Do you know how businesses started using this technique? Therewas a researcher at Kodak who advocated worksimplification--eliminating superfluous steps in how tasks aredone. Because he worked for Kodak, he had ready access to camerasand film, and it occurred to him to ask supervisors if they mindedwhether he filmed workers. Later, in watching the film, supervisorsinvariably would say "This can't be. Clearly, the processwe're using is wrong."

A conclusion of this research was that it isn't necessary togo over the video with a worker or supervisor. Just let them watchit, and they'll see what needs to be re-engineered and wherenew steps could achieve better results.

The larger point is, learn to look at jobs from anoutsider's perspective. Take nothing for granted. Bring a freshpoint of view, and suddenly, you'll see places whereimprovements can be swiftly made.

Entrepreneur:You're saying that workers--withoutany management input--will find ways to do their jobsbetter?

Zenger: The historical idea was that managers think andworkers do. But that concept no longer holds true in today'sworkplace. Often the only step that's needed to get good ideasfrom workers is to simply ask for them. If you can convey to themthat you value their input, they will give it.

Entrepreneur:Aren't workers sometimes reluctantto offer ideas for improvement?

Zenger: You have to send a clear signal: We want yourideas, and we value them. We all know organizations where, for manyyears, workers who offered their ideas were in effect slapped andtold to get back to work. And those workers naturally stoppedcoming up with ideas.

The Japanese have taught us huge lessons in terms of gettingemployee suggestions. For many years, Japanese companies gothundreds of suggestions from their workers for every one suggestionwe got. Why? Japanese management encouraged worker ideas, listenedto them, and implemented many of them.

Entrepreneur:Haven't we also gone astray bylooking only for big ideas, while Japanese companies continued tosteadily improve work processes by implementing literally hundredsof small ideas?

Zenger: That's exactly right. Of course we wantbreakthrough, audacious ideas. But we also need small, incrementalideas for making things better. To win a baseball game, you wantboth home runs and singles--but often, with enough singles, you canstill win. The Japanese have not had a lot of home runs, but theyhave had many singles--and their productivity keeps improving.

Entrepreneur:Company mission and vision statementsnowadays are commonly mocked--but you strongly endorse using them.Why?

Zenger: "Dilbert" has poked a lot of fun atthem, and certainly there are many businesses that writehigh-sounding words but do nothing about them. But I find thatpeople really do want to work for an organization that has a cleardirection; plus, most of us want to be involved in a worthwhilecause that we can grab hold of. And a huge deterrent to highperformance is when people don't understand where the companyis going, why it exists and what it believes in. The evidence isthat mission and vision statements that clearly state what webelieve in and how we will operate remain very valuable.

Entrepreneur:What types of mission statementswork?

Zenger: The best mission and vision statements aren'tcreated out of thin air. They state what already exists. They mustdescribe what really is happening in the business--that's themission. And what the people in the business truly cherish, as wellas where the business is heading--that's the vision. Thesestatements could be written on butcher paper and taped to the wall,but they would still have impact. That's because they bringclarity and coherence to the company's purposes by focusingdiffuse ideas into a laser beam that gives people the directionthey need and want.

Entrepreneur:Do you track your ownproductivity?

Zenger: [laughs] It's been a few years since Irigorously looked at it, but certainly, I have set goals to keepimproving. For instance, I set a goal to do my regular job pluswrite Not Just for CEOs. When that book was done, I set agoal to write a second book, Making 2 + 2 = 5 [IrwinProfessional Publications], for managers who want to get moreproductivity from their staffs.

Entrepreneur:What's the secret to making two plustwo equal five?

Zenger: There's no one secret--and maybe that'sthe real secret. No one step will get you all the productivitygains you want. But my research is clear: There are steps a leadercan take to get people performing at a higher level.

Entrepreneur:For instance?

Zenger: Leadership is not about knowledge, about beingthe smartest. It's about results. What distinguishes greatleaders is their ability to get superlative results. What'sbehind that is, yes, a certain amount of learning. But they need tobe doing certain things that get results. There are several keysteps:

• The leader accepts personal responsibility for the performanceof his or her workers. He steps up and says "I won't blameanyone else or anything in the outside world--not the government,not the economy. I am responsible."

• The leader banishes bureaucracy and builds a culture that ishighly responsive and adaptive. Where necessary, he or sherestructures work processes for greater efficiency andproductivity.

• The leader then raises the bar and says "What we are doingnow is not good enough." The leader sets new standards. He orshe might benchmark performance against other organizations orsimply set internal goals to, say, cut cycle times by one-quarteror one-half.

• The leader finds out who the top performers are and teachesothers to behave more like them.

• The leader gives employees tools to help them excel. Forinstance, he or she makes sure workers get necessary training andimplements performance feedback systems that give people real-timeinput on how they are doing and where they can improve.

• Then the leader's job becomes a matter of keeping theplates spinning--and that will move the organization to the nextlevel by continually setting new standards and changing internalprocesses for higher efficiency.

Entrepreneur:While large corporations are spendingincreasing sums on employee training, small businesses are laggingbehind. Does this pose a competitive handicap for smallbusiness?

Zenger: There is more training going on in smallbusinesses than might initially meet the eye. What often happens isthat small businesses send their people to off-site, one-dayseminars--sponsored by organizations like the American ManagementAssociation and local colleges.

That said, there is still no question that big companies aredoing a much better job of training and developing their people.But small businesses have an advantage: Many good workers areattracted to them because in a small business, they can use a widerrange of their abilities and see the results of their efforts.

There are cynics who say that 80 percent to 90 percent oftraining has little impact--not because the training is no good butbecause the organization isn't ready for it and does nothing toensure that what's learned gets used. That's not likely tohappen in a small business. When a small business invests intraining, it really wants its employees to come back and do thingsdifferently.

Entrepreneur:Is formal training mandatory fordeveloping workers?

Zenger: I have spent my life in training, but I don'tfor a minute believe that all good training takes place inside aclassroom. Some does. But in every company, a great deal oftraining takes place casually, informally. Small businesses can getgood training results if they just think about it.

I know an entrepreneur who owns a little company in the SiliconValley that makes labels for high-tech equipment. This entrepreneursees his job as a trainer of his people, and every morning heconducts a class for them that runs maybe a half-hour.

There are lots of ways to develop your people, and the realleaders are always looking for ways to make their people better,more productive workers.

Contact Sources

Times Mirror Training Inc., 1735 Technology Dr., SanJose, CA 95110, (408) 452-1244.