Critical factors

The economic value of love

Just before COVID, I was flying from Istanbul to Sicily, on my way to a meeting of an international expert group of consultants.

I introduced myself to my neighbour, who I found out was Giovanni Scafidi, COO of Eldor, an automotive components manufacturer. We had two hours in front of us, so I started asking questions: “What’s the biggest achievement of your business? What’s your secret to success? What’s next for you?”

Giovanni was a willing and passionate responder to my many questions, flipping open his laptop to show me videos, financials and photographs. I thought we’d be talking automotive parts for an hour, but instead, Giovanni blew me away by explaining exactly how his company had grown from nothing in the 1970s (running a small workshop near Lake Como) to half a billion Euros revenue today and manufacturing on four continents.

Their greatest achievement?

Defect free factories (one of their customers, VW, demands less than 150 parts per million with faults; Eldor delivers 1 per million — and often none). Their secret sauce? Being values based, with love (yes, love!) as their primary principle.

Giovanni said, “Some can compete on technology, or costs, but we compete on values. Nobody can beat us”. Next steps? Eldor is constantly ‘rebirthing’: In the 1970s they made parts for televisions; today they produce ignition components for internal combustion engines; tomorrow, parts for electric vehicles, with a goal of doubling again within 5 years.

Question: Which one of your values has the clearest link to tangible, measurable results??

Stay, or go?

I’m dismayed by research that tells me this: “Managers account for 70% of the variance in engagement” (Gallup).

Put simply, “People don’t stop working for companies; they stop working for people”. People who stop working hard, and then ultimately leave, often are driven by one sentiment: “Bosses don’t care”.

I’ve worked on two projects this year that had the same objective: dramatically improve employee performance and engagement through aligning people’s job roles with the company strategy.

One of my recommendations to both these organisations is instead of exit interviews they should conduct ‘stay interviews’ where employees are asked (by their managers) questions like "What motivates you to stay here?" and "What may?cause you to leave?”. Not everyone answers entirely frankly, but in my experience this process gives enough new information to help leaders keep their best people from leaving.

Question: What would happen if you conducted ‘stay interviews’ with your direct reports?

Ripple effects

Have you ever seen a single event have consequences that multiplied, sometimes unpredictably?

In Yellowstone National Park, grey wolves had been wiped out in the 1930s. As the apex predator, this meant that their food source, the elks, multiplied dramatically.

Sounds OK, yet, when wolves were reintroduced in the 1990s, guess what happened? Yes, fewer elks, but also more mobile elks. This meant less grazing on willow trees, which now flourished, which meant more beavers (who eat willow stems). Beaver dams change water courses, meaning more fish, and the willow stands mean more songbirds. How much of this was predicted? Ecologists confess that little of this was known until it happened.

Just in the past year, I’ve recommended many ‘grey wolves’ to my clients: dismiss a destabilising leader, consolidate sites dramatically, exit a non-core business. In each case, we’ve seen hugely positive ripple effects (while keeping a close eye on unintended negative consequences).

Question: What ‘grey wolf’ in your organisation would create desirable ripple effects?

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Look out for evidence that love is in use within the businesses that you frequent, and I look forward to being with you again next week.

Andrew