• The Business Owner

The relationship between team and growth

As part of our monthly People focus, we’ve been assessing the fundamental HR issues in this ever-changing environment we’ve found ourselves in. How do you interact with your team, how does the leadership of your company affect the potential for increased profitability, growth and success? We asked Paddy Thompson at Azimuth Training, a reader and contributor to the Business Owner Magazine, for his input relating to the essential relationship between employee engagement and business success.


‘2020 has created a global environment of insecurity and instability. Employees are looking to their employers now more than ever for stability and confidence. Similarly, organisations are looking to improve productivity and profit whilst reducing turnover of staff.


Covid-19 has created an opportunity for organisations to increase engagement with their people and push forward toward success in 2021 and beyond.

Organisations that revisit their purpose and remind their people why they do what they do should find themselves in the best position to achieve success with a more engaged workforce.


But how and why is this true?


“Doing what is best for individuals, does not have to conflict with what is best for the business or organisation”. (Gallup, 2020)


Organisations with high employee engagement have:

10% increase in customer loyalty

23% improvement in profitability

18% increase in turnover

81% reduction in absenteeism

41% reduction in quality defects

66% improvement in wellbeing


Comfort – Connection - Contribution

Looking forward to 2021 and the Post-Covid-19 world thereafter it is likely that our employees will remain dispersed as the traditional role of the office is reduced to an occasional setting instead of consistent backdrop.


Our teams are becoming more diverse, dispersed, digital and dynamic. This has potential to create an environment in which teams are vulnerable to two corrosive problems – “us versus them” thinking and incomplete information.


Managers can achieve huge returns if they create a high-performing, engaged team. Professor Mark Mortenson, from INSEAD, has worked on J.Richard Hackman’s initial work and identified these four key factors for success:


· Compelling Direction

· Strong Structure

· Supportive Context

· Shared Mindset.


Having an engaged workforce creates massive benefits for your organisation. This is what WD-40’s current CEO, Garry Ridge recognised when he took the helm in 1997. By acting on this he has created an organisation with some of the world’s highest employee engagement scores:


· Overall employee engagement - 93.3%

· Respect for my manager - 96.4%

· I feel my opinions and values are a good fit for WD-40 company - 99%


Its Market Capitalisation has increased from $250 million to $1.9 billion (an inflation adjusted increase of 369% over 23 years)


Businesses increase organic growth through human development.

The best business development programmes teach managers to be coaches, not bosses. These managers can link their business needs to employee talent and customer requirements, using practical, day to day guidance.


Gallup estimates that the cost of poor management and lost productivity from not engaged or actively disengaged employees in the U.S. is between $960 billion and $1.2 trillion per year. Globally, the cost of poor management approaches $7 trillion - or 9% to 10% of the world's GDP. (Camilleri, 2020)


Traditional management practises don’t overtly cause damage to your organisation, or at first glance to the bottom line. But the attrition of poor engagement, less loyalty, more mistakes and less productivity all add up to create a lot less profit.


Focussing on strengths of individuals and developing these, with peers and expert-led feedback provides actionable, real world learning that creates leaders who:


· Drive engagement

· Increase productivity

· Set and maintain high standards

· Improve culture

· Open communication channels


People are at the heart of everything within your business. Even the most virtual, IT driven, cloud-based company has human components that need to interact in a productive method to drive the business forward. Companies that spend time and effort on maximising the communication, vision and methodology within the team will no doubt grow faster, have more stability and be more profitable.


Thank you to Paddy and his team for his insight into this area. Azimuth are training and business people development specialists and you can find them at azimuth.eu.com