Bringing out the best throughout a manufacturing organization can add as much as 10 to 20 percent each year to the bottom line. Servant Leadership can bring out that best.
How can small to mid-sized US manufacturers compete at home or overseas when competitors can purchase equipment and raw materials from the same suppliers, copy strategies, chase customers and markets, and produce copycat products?
Here’s one way: servant leaders. That’s not something easily duplicated. In today’s highly competitive manufacturing environment, servant leadership—a concept that helps employees discover and reach full potential and abilities—profits the organizations served. A trained group of servant leaders—that will organize, encourage, teach, communicate and energize a company’s workforce—can add as much a 10 to 20 percent each year to a bottom line. This helps build and sustain a competitive advantage for US manufacturers.
In his book, “Servant-Institutions in Business,” Jerry Glashagel, a Greenleaf Center Program consultant, describes the characteristics of servant-institutions in business and how companies approach the challenge of serving employees and business and community partners. According to Glashagel, one study compared companies made famous by Jim Collins’ book “Good to Great” with those applying servant leadership principles, such as Toro Company, Southwest Airlines, Starbucks, Aflac, Herman Miller, FedEx, and Medtronic.
The study looked at a 10-year period ending in 2005. It revealed that when stocks from the S&P 500 averaged a 10.8 percent pre-tax portfolio return, and the 11 companies studied by Collins averaged a 17.3 percent return, the servant-led companies averaged a 24.2 percent return.
“Although servant leadership sounds like a contradiction, it’s a practical leadership process that inspires the best from both leaders and the workforce,” says Bill Flint, author of “The Journey to Competitive Advantage through Servant Leadership” and president of Flint Strategic Partners, a full-service business consulting firm headquartered in Goshen, Ind. that helps small to mid-sized manufacturers close the gap between current results and company vision and strategy.
“Servant leaders view people as problem solvers, not as problems,” says Flint, who rose through the ranks to become president of two manufacturing firms in almost 40 years of industry service. “People are hired not just for their hands, but for their heart, passion, and potential they bring to their work, and leaders are tasked with bringing that out to create competitive advantage.”
Beyond Command and Control
What holds back many US manufacturers in these uncertain times, according to Flint, is a growing gap between management and the workforce brought on by stress, distrust, and frustration. Besides global competition, management faces tight credit, uncertain tax laws and EPA regulations, a diverse workforce, and the challenge of finding and keeping good workers despite high unemployment. Workers are threatened by persistent layoffs; reduced hours, pay, benefits; declining 401K plans, and the perception that management doesn’t care about them.
“Manufacturers are asking their leaders and people to increase sales, improve production efficiencies, and improve profits. But between the top line and bottom line are thousands of interactions that take place between leaders and their people,” says Flint. “Old style command and control ‘I say, you do’ leadership is no longer enough, if it ever was.”
Flint indicates that the servant leadership solution puts into practice the principles and philosophy of Robert Greenleaf, who is credited with coining the term in the 1970 essay, “The Servant as Leader.” Greenleaf wrote that servant leadership starts with a desire to serve – a natural, moral desire recognized as important by many people throughout the world. Service makes a difference in the lives of both those who serve and those who are served. It’s about building relationships that offer meaning and hope.
Flint, in his book, draws on his own experience leading manufacturing companies, including one that he and his team helped grow to $125 million in annual sales with 10 facilities. He shares real-world examples of how to put servant leadership into practice and how to train servant leaders to make a difference in the lives of the people they lead. The book also chronicles his own journey, and is intended to help senior management “build the company every person dreams of working for and every president has a vision of leading.”
One key method to boost profits in manufacturing, according to Flint, is to solve problems in production. For this, input from the production crew is indispensible. Flint has found that “people on the production floor know what the problems and issues are because they’re closest to the action.”
For instance, every day the production floor crew knows which machines produce excess scrap, which machines need maintenance, and which suppliers are creating issues, as well as who’s effective or not as part of the team.
“One of the best ways to tap into the collective wisdom of the people on the production floor is to hold regular town-hall meetings, [one-on-one] meetings and build relationships with the people you lead,” says Flint. “These are the times you say, ‘Let’s talk about the issues. What’s getting in the way of you doing a good job? What’s your biggest challenge in this shift? What can I do to be a better leader? What are your goals? How can I help you?’ But this cannot be faked. The people on the floor can tell the leaders who really care and those who don’t.”
Results Speak Loudly
Flint’s book reveals how the principles of servant leadership helped him turn around one manufacturing plant that was losing hundreds of thousands of dollars per month. Within one year, it was breaking even.
“By focusing on the people doing the work, we improved communication and production, and reduced employee turnover by 40 percent,” says Flint. “From the first days I spent on the plant floor holding town meetings, I realized that our people knew the problems, but that we weren’t listening.”
Perhaps the most effective way to communicate and lead is to run a manufacturing company as a servant leader, suggests Flint, whose consulting company offers four interactive training modules to help companies develop servant leaders. The training accomplishes this by helping companies teach leaders how to lead by focusing their strategy and efforts on people, not just tasks.
According to Flint, the training, coaching and mentoring process is one of the biggest needs in companies today because most have limited training budgets and spend only a few days a year on training. Flint also believes that companies need to realize that leadership development is an ongoing journey and not an event. It takes a process, a plan and the establishment of expectations for the type of leaders you want leading your company.
“Every company will have natural servant leaders, but may not be reaping the benefit of their leadership potential since management often doesn’t recognize their value or support their development,” says Flint, who shows how to identify and cultivate servant leaders in his book.
“Developing servant leaders throughout a manufacturing organization is not expensive,” he concludes. “It requires no equipment or external strategies. What it requires is true leadership that can create a caring environment of mutual trust and respect between people.”
If you can make that happen, he says, the rewards are significant and can be a sustainable competitive advantage for US manufacturers.
Author Del Williams is a technical writer based in Torrance, Calif. For more information about servant leadership, visit www.servantleaders.org. Visit www.flintpartners.com to sign up for a free one-hour webinar. Call 888-395-9054; email email@example.com, or e-mail Bill Flint direct at firstname.lastname@example.org.