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Business Journal
The Key to Productivity and Competitiveness
Business Journal

The Key to Productivity and Competitiveness

by Verapong Paditporn and Divya Verma

Organisational change has been, and continues to be, an issue frequently discussed among the Thai business community ever since the difficult times experienced during the economic crisis of 1997. A common complication among Thai companies is that they are focusing on an organisation-wide change from the boardroom that includes a change in culture, mission, vision, restructuring of operations, and the inclusion of new technology all with the aim of increasing productivity, thus becoming more competitive in the local and worldwide market.

We all know the "champion" facilitates great managers to shoot "silver bullets" successfully from the boardroom to the workplace. They are vehicles responsible for transforming boardroom inspirations into achievable policies and practices. Great managers identify the unique potential of each individual employee, and set them on their own distinct path to success.

In the past few years, Gallup has investigated the business outcomes of managers with a wide array of characteristics from all around the world, to explore the success of effective managers. The results illustrated that great managers generate business outcomes differently from average performers in many ways.

We found that the front-line staff turnover of a restaurant normally averaged 159%; but this decreased to 140% in the presence of a talented manager. This figure was substantially reduced again to 106% when combined with a workforce of high engagement. We established a similar pattern for financial account executives; with turnover rates dropping from 22% to 21%, and to 18% respectively.

While analysing the hard evidence displayed in financial business outcomes, we found a consistent pattern showing significant differences in productivity for varying workgroups. We assessed those directed by a talented manager, a non-talented manager, and a talented manager who possessed a highly engaged workgroup.

We concluded that great managers retain talented employees, and engender a drive for higher productivity in the workplace; and their presence provides a catalyst for an increase in the quality of products and services offered. In the retail world, actual sales proved to be 17% greater when a talented manager was combined with an engaged workforce. In the technological sector, we found an increase of more than 30%.

In numerous cases, we found that both the work unit, in conjunction with a great manager, create their own unique culture in such a way as to develop and sustain world-class performance.

How do great managers do it? How do they release the potential energy of their people? How do they select a person, set expectations, motivate and develop each and every one of their employees?

In the Thai business community, convention suggests four core activities for a manager:

  • Select a person, based on his experience, intelligence, and determination.
  • Set expectations, by defining the right steps.
  • Motivate the person, by helping him identify and overcome his weaknesses.
  • Develop the person, by helping him learn and get promoted.

On the surface there seems to be nothing wrong with this advice. In fact, many managers and many companies follow it devoutly. But all of it misses. You cannot build a great team simply by selecting people based on their experience, intelligence, and determination.

Defining the right steps and fixing people’s weaknesses are not the most effective ways to generate sustained performance. And preparing someone for the next rung on the ladder completely misses the essence of "development."

Great managers share certain insights. People don’t change that much. Don’t waste time trying to put in what was left out. Try to draw out what was left in.

If you apply this to the core activities of the catalyst role, this is what you see:

  • When selecting someone, they select for talent, not simply experience, intelligence, or determination;
  • When setting expectations, they define the right outcomes, not the right steps;
  • When motivating someone, they focus on his strengths, not on his weaknesses;
  • When developing someone, they help him find the right fit, not simply the next rung on the ladder.

These four "keys" reveal how managers unlock staff potential.

This article was originally published in the Bangkok Post on July 30, 2003. Reprinted with permission.


Verapong Paditporn was a Partner of Gallup in Bangkok, Thailand.
Divya Verma is a Consultant for Gallup in Bangkok, Thailand.

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