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Speaker: welcome back everyone to another episode of the Commercial Leader podcast. My name is Bram Lagrou, and let's talk business metrics. Every time when we sit down with business leaders and we talk about business metrics, we all know that these metrics give us a story. They tell us whether we're on track or off track.
Now, whether those are financial metrics or other metrics similar to NPS, culture, it could also be work health and safety claims. It could be things like recruitment costs and so on and so forth. All of these metrics are all there to tell us whether we're on track or off track, and the challenge that I always see is that people don't necessarily [00:01:00] think through where those metrics originated from.
Case in point, we all know that great employees join a great business and brand, and the opportunities that come along with working for a certain organization. And then they find themselves in the business working for a certain boss or certain manager, and if that doesn't gel well, if there is some disconnect between the senior person and the other person, then very easily this person might suddenly feel a certain way, and after a certain while say, "You know what?
I don't enjoy working here. I don't enjoy this relationship I have. I feel," not listened to, don't respected, I feel taken for granted. They talk to me in a way that I don't appreciate." And then they just go away. At this point in time, [00:02:00] not only has the business invested in recruiting this person, there's been onboarding costs, and any manager and any other person that has been helping that person get up to speed has all invested in this individual, only to see no return on that investment.
So what am I hearing here is right now, a psychological disconnect between one person and another let this great employee with great potential choose their welfare elsewhere, and all of it had to do with a people disconnect. Two different people not well aligned on a personal human level. Not that the vision was wrong of the company, or the pay was wrong, or the incentives or the perks and, you know, everything else that made people join in the first place.
All of that value proposition lined up well. It might have even been a great [00:03:00] place to work with all sorts of awards and accolades that attracted those people to come and apply for the role. But the person didn't feel connected to the closest person that they were working for.
And great people join great companies but leave for what they call then bad managers. Now, I'd like to just say here at this point in time that I don't believe that there's a lot of really bad managers in terms of bad intent. So it's not an intent issue.
I firmly believe after all of the work I've done working in 25 countries with leaders in everything from small, medium, and large or enterprise from private through to public companies, It's very clear to me that people just don't understand how other people think and act. They don't understand what really motivates people and what doesn't. They don't really fully appreciate in their heart where [00:04:00] others are coming from. Because as soon as people do things in a different way, it's very easy to fall back into what I call judgment.
Judgment means there's preconceived ideas on how things should be done, and they aren't doing it, so therefore they start pointing fingers. They say that, people are not displaying the right behaviors or, they're not getting back to them quickly enough, or they're taking too long, or they want too much detail and all of these sorts of things.
It's showing that people still, after all of this time, haven't understood what makes other people tick and how we should engage them. Great leaders, they make sure that they understand their stakeholders and that they have opened up their heart to them so that they can bring their best parts in engaging them.
Like imagine now, if I have a [00:05:00] preconceived idea of someone, I'm going to go in with a very reserved nature, which means I'm not gonna put my best foot forward. I'm not gonna be very warm and caring because of this stuff that gets in the way. So a preconceived idea, a grudge I hold, something where I feel that somebody else let me down and I'm disappointed with them.
It's garbage that gets in the way of connection. And really, we sometimes think that connection is an airy-fairy, fluffy idea. We think that, for example, culture and the likes and engagement, it's something that is very hard to put our finger onto. But ultimately, it always translates in the metrics that our businesses track. Whether people are engaged or not. Whether people are putting their best foot forward or not. Whether you [00:06:00] get the whole of the person or just a snippet of it.
And let's just now talk about another metric here. Any organization, apart from organizations that probably hire a lot of casuals, like students that are just looking for, short-term, gigs to get some money. If you filter that out and you're really looking at careers, like career choices, industries where people are coming to work full-time as an employee. If we only focus on those right now, it is very clear that if there's a high staff turnover rate...
and we all typically know what that looks like for every industry. We know that certain industries have a higher staff turnover rate than others. But guess what? Within those industries, the same ones, there's always those organizations that stand out in a positive way.
There's always organizations in every single [00:07:00] industry where the staff turnover rate is a lot lower than what it goes for elsewhere. I'm thinking, for example, of hospitality. We know that that's sometimes plagued with high staff turnover rates.
The point though is there's always certain islands within the whole of the ocean that do so much better, and then the question is why? Is it possible that the way people feel in their job and in the environment they work in is just making them feel a lot better than elsewhere? And that keeps great staff longer.
This is definitely one that I've noticed which is people only perform and only put in as much as they feel they are getting out of it. And sometimes there's also the flip side of it, that at certain industries just keep holding a lot of people, but they've already checked out a long time ago, which means you're not [00:08:00] getting the best of them.
They're not performing really well, and very often they're in preservation mode rather than innovation and growth mode. And that is a problem for a business. That is making you less productive as an organization, and it actually also lowers the bar of performance for everybody else in the organization.
So great managers and leaders are supposed to filter out the people early on, support and nurture those people, and ensure that they really attract and keep the best people that they can get in their industries.
And here is now, of course, where this easily falls over, especially when we're in an economy where there's more jobs available than there's actually workers for it.
The job market is swinging in favor of the ones that are seeking employment, whereby they're a lot more comfortable, [00:09:00] they're can expect a lot more, they can demand a lot more in return for securing a job. And this is, I think, sometimes where as an organization, we start getting into a mode of, "Ah, but we can't really, press too hard," or, "We can't really, expect more of them, and we can only pay this much, so therefore we're..." Notice, all self-limiting beliefs. I just love it when I see organizations that have confidence in their value proposition, confidence in what they're about, back up their purpose, and that they are focusing on creating a great place for the right people and set the bar high.
I personally respect organizations that do- that go this, no matter how high or low availability is of re- of resources. Now, also understand that the job needs to get [00:10:00] done, and sometimes it's easy to go for lowering the standard, lowering the bar just to get somebody in. But guess what? I also believe that if people just talk about an organization as an employee in a way that is so glowing, so positive, that it becomes a magnet for other people like them.
And that is sometimes even though you don't have the highest pay in the industry. So once again, let's talk business metrics here.
Another one now, work health and safety claims. This is an interesting one. It's a different way of looking at it. Some people would say, "Ah, well, it's all about processes and systems and all of that."
And yes, there's a lot of value in them. However, we all know also that when people don't do what the process or the systems look like, and they don't [00:11:00] follow through for whatever reason, take that out of consideration. It's the leaders, supervisors, and the likes that either pull people up on it and educate them again and make sure that the next time they do better, or they shy away from it.
They turn a blind eye to it. They don't wanna rattle the cage. They don't wanna upset anyone. They'll just think, "Ah, you know what? I'll just let this one slide for now, and next time when it comes, I'll do it." If we know that in a country like Australia, we know that a very vast chunk of people are people-people.
Now, in Australia, thirty-six percent S, thirty-four percent I on the DiSC. That's seven out of ten Australians are people-people. That means then if they are a people pleaser, that they will not easily have this conversation, especially when they're high S, because high S is conflict shy and rather avoids than having the conversation.
Now, [00:12:00] notice if you have a supervisor, a site manager, or a leader or a manager overall, and they're high S If you don't address this and make them aware of this, and you build their sensitivity and emotional intelligence and leadership capability in this space, it's very easy for them to not have the conversation, and therefore expose your business to more, work health and safety claims.
Yes, incidents. Yes, accidents. Yes, because people haven't been equipped with the right thinking and acting behaviors. And this is all predictable and preventable because it's science. So rather than working against the stream, I believe again that it's important that you always go to the root cause, the root cause analysis as we talk about.
And that is, again, in this case of work health and safety claims, [00:13:00] we can bring down those things by, yes, putting systems and processes in place, but also make sure that the people have the right tools to initiate the conversations that truly matter. Every conversation that has high stakes, like safety of other people, has to have that backing, and too often we just look at the work health and safety claims and think that we need to put more systems and processes in place, and that's not necessarily where it might be falling over.
It's the people, and again, we can do something about it. So the business metrics, let's look at it for the story it's telling us and allowing us to go back to the root cause. Another one now.
We talk in sales and business development land, and we make a difference between, for example, account managers and business [00:14:00] development managers.
And we know that account managers are the ones that are meant to look after, but also secondary, make the most of existing clients. By the way, you don't need the formal title of account manager to be an account manager. I think that's really something that often is missed.
But let's just say that we'll stick to the ones that do have the title. Too often I see these people go into reactive comfort mode whereby they just think that it's looking after that is enough. Notice if you're being given a group of clients to look after, there is great opportunities to not just be a customer service person and look after their needs and address their questions and be timely and professional and so on and so forth.
There's also an opportunity to open up more opportunities and potentially cross-sell [00:15:00] or upsell. And that piece is a proactive generation of new business, which I don't think too often account managers do well. They stick to the first thing, which is look after people, which typically goes well with their personal style, 'cause a lot of account managers tend to be high S.
But they don't necessarily look for ways to open up and grow the accounts. And so then the question is, how could we support them better so that these metrics really move the dial, and it's done in a customer service friendly manner? The other ones you look at, obviously, business development people.
Those managers are more hunters and gatherers and on the DISC you would think like more I and potentially D or a mix of both. If it's a, professional services or IT, it would be more like a combination I/C, which is rarer, but they are there [00:16:00] too. Anyway, business development managers, once again, those metrics, they tell a story.
I think that if the business development managers are more empowered to be less reliant on just systems and process it's important that they don't just do that, but they also add the buyer psychology into the equation.
I find that often when I work with people that haven't done any work with us before is that they're so rigid on process and systems, and they actually have kind of forgotten about who the people are that actually will wanna potentially take it on and invest in it. And so I always say start with the buyer first and then tailor-make the process to suit them, not the other way around.
We engineer it in a way that is so focused on our product service value proposition, our mission and the likes, that it's so focused on you as the solution provider. That's [00:17:00] navel-staring. That's kind of elevating yourself. Let's be honest, especially in a world where commoditization is real and where competition is there, and where there's always somebody that can do it cheaper, faster, better potentially than you...
we don't have the luxury really to think that way. And the more we reverse engineer it and start back from the source, which is who's my buyer? Who's my investor? Who is my key stakeholder? Who are the multiple people within them that all have an influence to the decision-making? And make sure that you map them out and fully engage them in a way that excites them or, engages them and that really makes them feel comfortable.
Then you start working with how the brain of each person is designed to, yes, don't detect threat. Two, build rapport and trust in who you are as a person and your business and your [00:18:00] products and services. And then three, be open to talking about what doing business together might look like and what the terms and conditions are, and pricing and investment, and so on and so forth.
But people don't open up until the emotional component on level one and two are safeguarded. If they have gotten the thumbs up in their brain. And once again, too much focus on systems process or product and terms and pricing and the likes eradicates all of that. It kind of takes that all out of the equation.
And then it's a hit-and-miss approach, which again, our metrics give us great insight into.
If, for example, you see that for every proposal, every quote, every tender, you're only getting a strike rate between 10 and 20%, you know that there's a lot of wastage that somehow didn't eventuate. And then the question is why not?
[00:19:00] Why did all of the other people don't proceed with your value proposition even though they were in the market for it? Well, then once again, it means that psychologically speaking, you haven't spoken their language. You haven't resonated with them well. They haven't felt fully engaged with your offering or you personally and your engagement.
And it's all, first of all, feelings, which is so bizarre But it's feelings first, only logic then. And too often we're so damn focused on logic in business, right? So let's just be smarter than that. The greatest companies in the world, they have figured this thing out, and they have higher conversion rates than 20%.
Many of our clients do 40, 45, 50, 65. We've got some really isolated cases that do 95%, even with tenders, and they're not the [00:20:00] cheapest. Now, why is that? It's because they really nailed the science of it, which is the science of emotions, how to deal with people. And whether you do that in a leadership engagement perspective for staff in your business, or you do it with external stakeholders such as clients or business partners and suppliers and referrers.
With all of those, it's the same traits of human beings and how we engage them that either works for us or works against us. So it's important that we get these principles right.
So business metrics. Let's just summarize them briefly. We spoke about work health and safety claims.
We haven't even talked about absenteeism or number of sick days. But once again, the more sick days people have in your organization, the more it's a symptom of a problem that is predictable and preventable. And often, especially if people are sick, [00:21:00] it's an emotional need that somehow is expressed through sickness that isn't being met.
And therefore, the question then is, how quickly and bravely will you actually own up to the fact that things are not really there yet where you could get them? All you gotta do is recognize it first, become self-aware, diagnose the issue, get to the root cause, and from there, address it once and for all.
Once you turn that around, you reap the benefits for a very long time. So staff turnover rate, recruitment fees will go down. Productivity will go up. NPS scores will go up. Cultural scores will go up. People will just contribute more. People will stay longer. All of these metrics that we all have available there, they're important from a leadership perspective.
On the flip side, we also have then all those metrics in sales and business development land, and they are all [00:22:00] in your control.
My name is Bram. Thanks again for tuning in with the Commercial Leader podcast, and look forward to seeing you again next time. Thanks.
