The Link Between Fear and Profit – Part 1

Kay Sever
Kay Sever

By Kay Sever, Mining Improvement Specialist and Change Leader, CMC

Have you ever worked in a company where people were afraid to share information? If you have had this experience, you remember what it was like and how frustrated you were when people did not have the right information to execute a task or solve a problem. It is one thing to not talk because a procedure excludes communication steps… it is quite another to be afraid to communicate.

The impact of fear in the workplace is far reaching because it is linked to a mindset, not a process or procedure. Mindsets are like umbrellas… they are overarching in nature and touch many activities in an organization. Fear stops communications in day to day work activities, problem solving and department collaboration on projects. When people are afraid to speak about problems, financial risk or options for completing a task, recurring problems continue and activities that depend on good communications break down, causing unmeasured financial losses.

Fear of sharing information or speaking about problems usually has its roots in management style. If people feel free to reveal problems, management’s response is the key to keeping that kind of communication flowing. If management chooses the wrong response, people will be afraid to speak up next time… and that’s when hidden financial losses start to occur.

Here’s Part 1 of a two-part series about the impact of a fearful culture on the bottom line:

PROJECT MEETINGS:
If you have worked in a fearful culture, you probably remember what meetings were like, especially project meetings (engineering, systems, improvement, etc.). You may even be able to instantly recall a specific meeting and maybe even the topic discussed. The atmosphere in the room was probably uncomfortable with some people wishing that the meeting was over before it started. Based on what you knew about the “culture” (how people thought and worked with each other), you may have been able to predict that:

1) Only certain people would speak at the meeting.
2) Key stakeholders closest to the problem would remain silent.
3) One department often “took control” of meetings and was known to intimidate those who might question its assumptions or data used to reach a conclusion.
4) The department that took control also controlled the purse strings and often made decisions about equipment or systems for the departments that were the end users.

Example: An engineering group created and managed projects for sites. People that worked in this group were mechanical engineers and civil engineers with years of project experience. The group was originally created to take the burden of project management off site personnel; however, over the years the project management group worked more like a “silo” department that dictated the quality of the final product. Periodic status update meetings were held at sites. Site end users seldom asked project managers about potential pitfalls because they were “put in their place” for questioning assumptions or design specs. To make matters worse, one of the project managers was the relative of an executive. This relationship made it even harder for site personnel to question his assumptions or his work.

As a result of this fear-driven culture,
1) Project designs frequently failed to meet site-specific needs and did not accommodate process or geographic restrictions.
2) Millions of dollars were lost and critical deadlines were missed because site personnel were afraid to interact with project managers when it counted the most.
3) Large project contingencies (established by the project group) hid the true impact that culture was having on project ROI, income and cash flow.

Management did not know that there was a link between fear and profit in the culture, which gave them a narrow “tunnel vision” focus. If they had invested in new equipment to achieve optimization, they would have made less money than they could have because their fear-based culture would continue to create unmeasured losses behind the scenes.

This management team’s lack of awareness resulted in a lack of urgency to change what they were doing to remove the fear. Replacing fear with freedom to speak would have cost them nothing and would have yielded higher project ROIs and millions of extra dollars of income for the foreseeable future. All these dollars were totally controlled by the choices management made.

What about your company’s culture? How would you answer these questions?
1) Are people afraid to talk about problems?
2) When people have the courage to speak about a problem, is money often saved?
3) When it comes to projects, how much of your contingency is an allowance that covers losses caused by fear and other weaknesses in your culture?
4) What if you could cut your contingency in half by changing your culture?

Thought for the month: Management is in total control of fear in the workplace! When people have the courage to speak about problems, millions of dollars are saved. When culture is ignored, unmeasured losses can run into the millions of dollars.

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Kay Sever is an industry leader in performance optimization, culture transformation and change acceleration. She helps companies experience “break-through change” by removing the organizational barriers that prevent greater profits and collaboration in day to day activities, problem solving and project management, as well as post-merger culture transformation. Kay created the world’s first management training and tactics program about the impact of perspectives on profit, culture and change. Management teams gain a new awareness about their power to shape the culture they desire, remove the invisible barriers that hold them back, and create a culture capable of maximizing profit without compromising safety or regulatory compliance. See MiningOpportunity.com for details on her contact information.

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Kay Sever
Kay Sever Author
P.O. Box 337 Gilbert, AZ USA 85299-0337

Kay has worked side by side with corporate and production sites in a management/leadership/consulting role for 35+ years. She helps management teams improve performance, profit, culture and change, but does it in a way that connects people and the corporate culture to their hidden potential. Kay helps companies move “beyond improvement” to a state of “sustained optimization”. With her guidance and the MiningOpportunity system, management teams can measure the losses caused by weaknesses in their current culture, shift to a Loss Reduction Culture to reduce the losses, and “manage” the gains from the new culture as a second income stream.