One of the things we’ve tried to prove at Barry-Wehmiller is that in business, you don’t have to sacrifice economic value creation in order to care for those you have the privilege to lead.
It’s not a one or the other proposition. We call it people and performance in harmony.
A useful analogy is that of a Ferrari engine. It will run on 85 octane fuel, but it won’t run to the potential of the designers of the engine. However, if you put 91 octane fuel in the engine, it will optimize the design of the engine. On the other hand, if you put premium fuel in a Toyota engine, it will not allow that engine to race a Ferrari.
So, think of your business model as the engine and the culture as your premium fuel. A good business model is the foundation for caring for your people and your culture is the fuel that activates that engine and produces the power of the design.
At Barry-Wehmiller, our primary purpose is crystal clear to us: We’re in business so that all our team members can be part of a business that creates economic and human value that serves all stakeholders.
We do everything we can to create an environment in which our people can discover, develop and share their gifts and know that who they are and what they do matters.
But we also have to be creating economic value in line with our investors’ expectations to make all of that possible. We do that through the various services our companies perform, such as the building of capital equipment and offering engineering consulting. Our businesses provide the vehicle, the economic engine, through which we can enrich the lives of our team members. And without a successful business model that allows our business to grow, we wouldn’t be able to provide opportunities for our people to grow.
So, when you truly care about your people, you not only need to give them an environment where they feel like they matter -- where their gifts and talents can thrive -- you also have to make sure their livelihoods are safe and secure with a well-designed business model.
Furthermore, as we’ve as we’ve recently heard, for people to truly feel like they matter they need to feel valued and add value. All of us want to make a contribution, not just for ourselves but for our fellow team members. When each of us embrace our role and perform it to the best of our ability, we create a better future for our colleagues. Having the opportunity to contribute to the successful performance of the business in which we are involved is another way we feel like we matter.
At Barry-Wehmiller, we truly believe our success is due to the emphasis we place on the harmony of people and performance. And new research from the McKinsey Global Institute is bearing out our example.
Despite the poor phrasing in the title (people aren’t “human capital,” they are someone’s precious child within our span of care,) a recent report titled “Performance Through People: Transforming Human Capital into Competitive Advantage” showed research into this premise: “Does investing in people actually benefit companies? Most business leaders agree that it’s the right thing to do. But they are less clear on how those efforts relate to the bottom line—and why some organizations are so much more effective than others at turning human capital (or as we would say, caring for those we have the privilege to lead) into a real competitive advantage.”
Here are some of their findings:
- Some firms (“People + Performance Winners”) prioritize developing their team members and manage to deliver top-tier profitability at the same time. These companies are more likely to become large-scale “superstars.” They exist in all sectors and average more than $1 billion in economic profit.
- People + Performance Winners have a distinctive organizational signature that challenges and empowers team members while fostering bottom-up innovation. This form of organizational capital contrasts with that of other top-performing firms, which tend to be more top-down and transactional. This leadership style seems to activate human capital and create a tangible competitive advantage.
- Building a (what we would call) truly human culture also pays off for firms in the form of more consistent earnings and greater resilience during crisis. In addition to being more consistent than their sector peers, human capital builders are better at retaining talent, with attrition rates that are about 5 percentage points lower.
- Corporate leaders need a deeper focus on the nuances of organizational capital. People are not merely a labor input; they are any company’s core asset (everyone is someone’s precious child.) The workplace should work for team members, with coaching to help them develop, structures for support, and workflows that remove frustrations.
It’s not just enough to be a successful business that creates value for your shareholders, or to be a great place to work. We believe we need to succeed for our people, who put their trust in us. Everyone should be part of a winning team, all stakeholders should gain from their association with us. This means team members, their families, shareholders, customers and the communities in which we are based.
A little more than a year ago, my son Kyle (who is President of Barry-Wehmiller) and I gave a talk to a group of St. Louis businesses on family businesses and family business transition, but it ended up being about much more. Kyle said this to that group about our belief in people and performance in harmony and how it drives his goals for our company:
What we are going to do is, we're going to up our game. We're going to show that you can operate with people and performance in total harmony, not one in sacrifice of the other. You do not have to sacrifice your people in order to have top quartile financials.
We have a lot to share with the world and we've got to have people believing in our business model, who we are, and where we're going in order to do it.
We believe business can be a powerful force for good in the world and that’s what we are trying to show through our actions.
The evidence is clear, business leaders. You can do the right thing and it is good for business. So now, what are you waiting for?