How would you describe the relationships that exist within your organization’s workforce?
Hopefully words like trusting, respectful, team-oriented and cooperative are among the first that come to mind because, the quality of those professional relationships has a greater impact on the bottom line than you might expect.
Somehow along the evolutionary path of business and commerce, it appears some of us have become increasingly enamored with the efficiency that a mechanistic and impersonal focus could bring us, and have concentrated on using the “hands” of employees at the neglect of employing their hearts and minds.
But for many the pendulum is swinging back, as more and more people are finding that the old attitude about separating business from personal issues no longer serves us well.
In fact, there is increasing belief that becoming more personal in the workplace might actually work to the advantage of organizations; and topics such as trust, interpersonal relationships, engagement, coaching, mentoring, and values-based leadership are becoming extremely popular in an increasing number of businesses.
For example, Mike Morrison, VP and Dean of Toyota University in a recent interview went so far as to boldly say, “My message to leaders is actually quite simple: It’s the relationship, stupid!”
He went on to suggest that human capital is useless without relationships-particularly in our fast-paced, global economy-and that leaders can be best measured by their ability to create social capital or the sum total of all their relationships.
“It is through this network of relationships that their work is conducted,” Morrison stated.
“As leaders, we need to be relentless relationship-builders and be 100 times more deliberate about relating to people. Work is much more relational than it was twenty years ago; today we get work done through others. In today’s world we achieve results primarily through relationships.”
Morrison concluded that relationships are truly the most effective pathway to the highest levels of commitment, creativity, and performance within organizations. The reason is that positive relationships have a transformational impact on the individual. They draw out the best in each of us.
Management guru Peter F. Drucker has also commented on the need to focus on workplace relationships.
“Increasingly, command and control is being replaced by or intermixed with all kinds of relationships,” he said.
“Alliances, joint ventures, minority participations, partnerships, know-how, and marketing agreements; these are all relationships in which no one controls and no one commands. These relationships have to be based on a common understanding of objectives, policies, and strategies; on teamwork; and on persuasion-or they don’t work at all.”
It has also been well-documented with facts and data that the cost of poor relationships in the workplace is significant; and in contrast, improving relationships improves the bottom line.
For example, a Watson Wyatt Worldwide study found a direct correlation between trust and profitability. Where employees trusted executives, companies posted returns 42% higher than those where distrust was the norm. In a different study, they found that of the 7,500 employees surveyed only half trusted their senior managers. So imagine the impact of improving the relationships with the ‘other’ half!
Another study on trust in the workplace conducted by Leadership IQ, which involved a database of 7,209 executives, managers and employees, revealed that 44% of participants’ responses ranged from not trusting to strongly distrusting their top management, and that trust significantly predicts employee loyalty and their inclination to stay or leave the organization. Having employees “go” is costly and especially so at the managerial and executive level.
Along the same lines, in his book The Speed of Trust, Covey quoted Professor John Whitney of Columbia Business School, who said “Mistrust doubles the cost of doing business.”
In addition to the obvious and direct costs of attrition (recruitment, severance, training, etc.), there are other costs associated with dissatisfied employees at any level. There is the pervasive, though often not measured cost of wasted time and lowered productivity – the unproductive time spent in unresolved conflicts, complaining about management or co-workers, lack of engagement and not putting forth best efforts. It follows that reducing wasted time, like reducing other forms of waste, can contribute to improved profitability.
Imagine how much better-off we all might be if we could better manage our relationships; as noted above, the improvements could be staggering!