The weary stereotype that pits people against profits collapses when you scrutinize it. Sure, squeezing payroll gets that last bit of toothpaste out of the tube for companies that hawk look-alike commodities. In innovative companies, however, good people generate growth and retain customers.
An obvious example of how people create profit is a successful tech startup. At our intelligent mobile robot company, for example, we could not just create a platform and sell it forever. We had to build a system of innovation that relied upon talented people, excited by the fun of being at the forefront. But we also had to pay good wages with benefits to assemblers in our factory. Why? Because when our customers opened the box in China or Germany, the robots needed to work. Employee care about reliability, as much as frequent innovation, made our company the world leader in its niche.
But maximizing people requires more than good remuneration. It means understanding the value of diverse viewpoints and expertise. As one employee told me, “When I worked for [another company], the engineers treated me like a piece of furniture. They did not even acknowledge my presence. Here we are respected.”
We included assemblers in company meetings and solicited their input, along with that of the PhDs and engineers. Why? Because assemblers know things like how long it takes to thread a cable behind other components, which an engineer might not consider. And, of course, because people are not cogs, they care more about the quality of a product and process they feel ownership in.
Startups are one thing. But people and innovation drive profits even more in struggling, older industries. New Hampshire’s paper industry is an excellent example.
Paper took a double whammy since the turn of the century. Overseas competition cut paper prices at the same time digitization cut demand for print. According to the Center for Paper Business and Industry Studies, over 100 US paper mills closed between 2000 and 2012, slicing nearly a quarter million jobs.
Yet some companies, including New Hampshire’s Monadnock Paper Mills in Bennington, learned to thrive. As the company puts it:
For generations, Monadnock Paper Mills supplied general-purpose, commodity papers around the US and the world. However, as globalization increased, it could not compete on price with companies in low-wage nations. Many lay-offs ensued.
Then the company researched premium product lines, in which it could compete based on quality and innovation. The company now makes medical, architectural, archival and 100% recycled papers and has built sustainable practices into their processes.
If you talk with company executives, you will learn another secret. Monadnock Paper has some of the lowest workforce turnover in the state. It pays good wages with good benefits. And every employee in the company gets face-time from managers every day.
Transforming a company in a struggling industry and building a startup both take visionary leaders who can inspire strong teams. The growth that follows brings more revenues that can flow to people and profits.
Founder, MobileRobots Inc
(Now Omron Adept Technologies)