{"id":25440,"date":"2023-07-15T14:28:00","date_gmt":"2023-07-15T19:28:00","guid":{"rendered":"https:\/\/trainingmag.com\/?p=25440"},"modified":"2023-07-17T10:09:22","modified_gmt":"2023-07-17T15:09:22","slug":"leaders-its-time-to-think-differently-about-how-to-increase-profitability","status":"publish","type":"post","link":"https:\/\/trainingmag.com\/leaders-its-time-to-think-differently-about-how-to-increase-profitability\/","title":{"rendered":"Leaders: It\u2019s Time to Think Differently About How to Increase Profitability"},"content":{"rendered":"<p>Regardless of whether or not a company is cash-flow positive, there\u2019s enormous pressure on CEOs and their teams to figure out how to grow a better margin.<\/p>\n<p>To do that, a company typically spends the majority of its time and resources on:<\/p>\n<ul>\n<li>Marketing, Sales, and Brand Campaigns<\/li>\n<li>Product Market Fit<\/li>\n<li>New Products and Add-Ons to Increase LTV<\/li>\n<li>Price and Promotions<\/li>\n<li>New Markets<\/li>\n<li>Payment Collection Options<\/li>\n<li>Negotiations and Cost Cutting<\/li>\n<li>Automation<\/li>\n<\/ul>\n<p>But executives tend to leave one core component off the list or view it as the lowest priority. To ensure those efforts pay off, companies need an engaged, motivated team, along with a joyful workplace culture.<\/p>\n<p>According to Gallup\u2019s 2020 meta-analysis of 112,312 businesses, the ROI for investing in <strong>employee engagement will increase profitability by 23 percent,<\/strong> and increase customer engagement by 10 percent, while significantly reducing turnover.<\/p>\n<p>Since an investment in employees will increase the return on all company endeavors, why not prioritize and invest in driving employee engagement? With so many founders and CEOs being self-appointed to the role, understanding how to foster employee engagement may not be readily apparent.<\/p>\n<p><strong>The key to increased engagement followed by increased profitability is making their primary focus driving the motivation of their teams. <\/strong><\/p>\n<h2>Strategies to Boost Engagement<\/h2>\n<p>So what strategies work best to boost engagement? Let\u2019s examine three common actions leaders take to increase motivation.<\/p>\n<h2>1. Bringing in an Inspirational Speaker<\/h2>\n<p>An inspirational speaker can share stories and insights that can help people to see their potential and believe in themselves. They also can provide motivation and encouragement to help people to overcome challenges and to achieve goals.<\/p>\n<p>However, there are two downsides to consider.<\/p>\n<ol>\n<li>Not everyone will be motivated by the same speaker.<\/li>\n<li>The speaker likely will only create a short spike in motivation.<\/li>\n<\/ol>\n<p>While good for a short-term confidence boost, leaders shouldn\u2019t rely on this \u201cfix\u201d to drive sustainable change.<\/p>\n<p>Even if the takeaways are reinforced by leadership, without a well-designed accountability system to implement the learnings, companies won\u2019t experience sustainable benefits of increased employee engagement.<\/p>\n<h2>2. Financial Rewards for Meeting Company Goals<\/h2>\n<p>Most businesses have a strategic plan designating SMART (specific, measurable, achievable, realistic, and timely) goals, owners, and deadlines. Clarity helps leaders know what\u2019s expected of them to be successful. Some businesses also attach bonuses to desired outcomes, usually reserved for upper management.<\/p>\n<p>There have been many studies on performance bonuses, a form of extrinsic motivation, to increase employee engagement and realize better outcomes.<\/p>\n<p>According to author Dan Pink, research conducted by behavioral scientists in more than two dozen studies in the last 30 years reveals that bonuses for performance not only demotivate employees but almost ensure they will fail.<\/p>\n<p>One study found that as long as leaders are careful with the program design, they work. For leaders who plan to design a bonus program, here are some findings to consider.<\/p>\n<ul>\n<li>Financial incentives for mechanical workers fare best, whereas knowledge workers struggle to feel criteria are objective and fair.<\/li>\n<li>End-of-the-year bonuses are not as effective because it\u2019s difficult to connect current behaviors to far-off rewards. Offering smaller incentives more frequently helps connect the dots better.<\/li>\n<\/ul>\n<p>What happens if the employee doesn\u2019t earn the bonus? Leaders need to be ready for the reality that employee engagement will take a hit.<\/p>\n<p>First, the employee may fear punishment. Second, they probably already earmarked the bonus or already spent it. Plus, if they are used to receiving it, they may consider it part of their salary.<\/p>\n<p>When financial rewards are tied to the incentive, people can feel overly controlled by that incentive, known as reactance theory, where that lack of freedom backfires and inspires<\/p>\n<p>rebellious behaviors and a lack of dedication to the cause. For example, if a sign for a museum exhibit says, \u201cDo not touch,\u201d some people suddenly have the urge to touch the exhibit.<\/p>\n<p>Some tips:<\/p>\n<ul>\n<li>If employees already enjoy a task, select tasks that are less enjoyable to incentivize.<\/li>\n<li>Rather than awarding bonuses individually, which encourages working alone while discouraging collaboration, offer them to the entire team.<\/li>\n<\/ul>\n<h2>3. Creating Opportunities for Growth<\/h2>\n<p>At the core, people want to spend their lives continually moving toward mastery. The most powerful force that motivates humans is intrinsic motivation. And creating opportunities for growth is a scientifically proven way to tap into one\u2019s internal drive.<\/p>\n<p>People feel intrinsically motivated even when things get challenging because pushing through is more likely to lead to learning and growth, feelings of joy and pride, and ultimately, the fulfillment found in long-term success and mastery.<\/p>\n<p>So how should leaders create opportunities, especially when promotions are limited and uncertain?<\/p>\n<ol>\n<li>Identify employees\u2019 strongest skill sets.<\/li>\n<li>Give them ownership of a project that plays to those strengths.<\/li>\n<li>Act as a thought partner throughout, providing guidance, feedback, and coaching.<\/li>\n<li>Create an opportunity for them to share their expertise in front of others.<\/li>\n<li>Heap on the recognition. Make it intentional by communicating what was valued about their work and why it\u2019s beneficial.<\/li>\n<\/ol>\n<p>This is a win-win. Leaders remove a task from their list while sparking a powerful intrinsic motivation. The employee is engaged throughout the process, fulfilled by their work, feels seen by leaders, retains newfound skills, and is one step closer to a promotion.<\/p>\n<p>Do this repeatedly and watch people tap into their intrinsic motivation and come alive while growing leaders, creating a more joyful workplace, and increasing the bottom line.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The key to increased engagement followed by increased profitability is training leaders to make their primary focus driving the motivation of their teams. <\/p>\n","protected":false},"author":2527,"featured_media":25441,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[11,12],"tags":[16],"class_list":{"0":"post-25440","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-featured","8":"category-magazine","9":"tag-feature","10":"magazine_issues-july-2023"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.2 (Yoast SEO v25.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Leaders: It\u2019s Time to Think Differently About How to Increase Profitability<\/title>\n<meta name=\"description\" content=\"The key to increased engagement followed by increased profitability is training leaders to make their primary focus driving the motivation of their teams.\" \/>\n<meta name=\"robots\" content=\"index, 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