The Link Between Fear and Profit – Part 2 by 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 the proper communication steps… it is quite another to be afraid to communicate.

In Part 1 of this article we talked about how fear impacts projects. In Part 2 we will discuss how fear impacts management’s ability to solve problems. Problems ALWAYS have a cost… financial impacts include lost margins, higher costs and lost production time. Negative impacts on trust and management credibility weaken the culture and cause further losses. Here are three “fear” scenarios linked to hidden financial/cultural losses:

1) When people are afraid to share EVERYTHING they know about a problem, management may implement the wrong solution. For any of you engineers, operations or maintenance experts reading this article, you know what that means… wasted costs, downtime and perhaps equipment damage caused by the first solution, then delays while a better solution can be found and implemented. Millions of dollars of losses may be linked to implementing the first solution that did not fix the problem. These losses are seldom measured, reported or linked to the root cause… fear.

2) When people are afraid to share ANYTHING about a problem, the consequences can be even worse. A problem may go unsolved for months or years if the people closest to the problem are afraid to bring it to management’s attention. The losses from unknown recurring problems offset earnings from behind the scenes, sometimes by millions of dollars. They become part of “historical” net revenue and variable cost trends that are used for setting next year’s budget targets. When problems are budgeted for, there is no variance that “raises a red flag” about their existence. The freedom to speak about problems may be THE ONLY WAY management discovers hidden problems that need to be fixed. If communications are not free and open, it is possible to be “On Budget But Losing Millions…

3) Sometimes fear of speaking about problems is not a workforce problem; instead, management may be afraid to admit that recurring problems exist or haven’t been fixed. This may be the WORST of the three scenarios because management is MAKING A CHOICE to overlook or ignore problems that may be costing a lot of money. When this happens, management loses a LOT of credibility with the workforce, the executive team and maybe even the board of directors. If the workforce believes that management does not care about problems, they will stop reporting them. This is when hidden losses from problems increase at an alarming rate.

Most companies don’t know how to assign dollars to problems, which add another layer to the problem. Data helps management teams focus on drivers of the business… without data for hidden losses, there is no urgency to “chase” losses linked to problems. If management does not know how to assign value to problems, they do not know how much money they are leaving on the table.

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. Management teams need to create a comfort zone for sharing the “Bad News”. This simple change can unlock millions of dollars in profit “trapped” by unsolved problems.

How much money is your corporate culture costing you?
1) Are people afraid to talk about problems?
2) When people have the courage to speak about a problem, is money often saved?
3) Does management ignore problems that they do not want to take responsibility for?
4) If you knew how to change the culture to stop your losses, how much money would you save?

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 steal millions of dollars from behind the scenes.
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Kay Sever is a leading expert in reducing losses caused by corporate cultures. She has developed a management training system called MiningOpportunity which is based on her 20 years of experience working with mines and plants to reduce their losses and work together more effectively. MiningOpportunity Training Modules teach executives and management teams how to find and quantify their losses caused by their corporate culture, then apply strategies and tactics that stop the losses by SHIFTING TO A LOSS REDUCTION CULTURE. Exclusive insights from Kay’s 3-year study of management barriers to change and optimization are included in the content. In six short months, profit, culture and change can all be transformed with this training system without compromising safety or regulatory compliance. See MiningOpportunity.com for details and 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.