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Running Too Lean is Dangerous to Employee Experience

Running Too Lean is Dangerous to Employee Experience

'Lean' has been business gospel for some years now. While there is wisdom in running a company efficiently and launching new initiatives based on the lean startup approach, lean can go too far. It can edge into the management equivalent of malnourished, preventing healthy invention and agility. Our research finds that one of the biggest barriers to an Innovation By All culture is employees experiencing a deep sense of scarcity. When people lack resources to get their work done or when they struggle to pay their bills, they can’t participate fully in innovation.

We see this clearly in the employee comment data we receive from our customers' surveys. When employees cited concerns with cost of living, regardless of industry or geography, they were significantly less likely to experience innovation. These concerns get compounded when they see their organization, or people at higher levels, thriving financially. In other words, innovation is stunted when people perceive that their financial scarcity feeds others’ success. One employee told us:

“I am not able to save any money to put towards my future while working for this company. I had to get a second job last year just to get extra driving money for gas. With a college education, graduating with high honors, and working for the company for many many years, they should bring pay up to scale with our job experience, where we live, and what we contribute to the company, so we aren't living paycheck to paycheck.”

For this employee, just making ends meet becomes an all-consuming issue. It also leads to resentment, which in turn is a roadblock to contributing great ideas to the organization. Scarcity within the workplace also leads to anemic innovation. Limited and ineffective resources on the job are common at companies that underperform on innovation. Here’s how one employee described their do-more-with-less store environment: “The location I work at has been understaffed for over three years. In the last year we've gotten down to about 2/3 a full store staff. We often don't have a single designated sales person staffing the sales floor.”

Another described how to improve their organization in explicit 'lean' terms: “Hire more people, instead of trying to run as lean as possible, so that we can focus once again on doing quality work instead of trying to do as little as possible as quickly as possible to claim a project is complete.”

It makes sense that people experiencing a shortage of money, time and help don't innovate for their organizations. Psychologist Abraham Maslow claimed human beings must have basic needs such as physical safety and security met before they can reach their highest levels of creativity and “self-actualization.” When employees believe staffing is bare bones and pay levels leave them scraping by — especially when executives and shareholders enjoy rich rewards—people cannot and will not offer their ingenuity to the organization.

To find great examples of companies that don't buy into the lean methodology, look no further than Wegmans. This grocery chain removes many of the concerns associated with economic security and on-the-job resources so employees can innovate. As a result, 95 percent of Wegmans’ employees say “I am given the resources and equipment to do my job.” That’s five percentage points higher than the benchmark for the Fortune 100 Best Workplaces.

Wegmans’ cross-training program is part of how the company creates an environment of abundance rather than scarcity. Joe Sofia, senior vice president at Wegmans, explains, “If we run short in a certain area—maybe it’s just busier that day than what we projected it to be—we can move employees around the store to help support our other folks so that they don't feel as though they’re being stretched too lean.” In addition, 81 percent of Wegmans’ staffers say people are paid fairly for the work they do. By contrast, just 41 percent of employees nationwide across all industries believe pay is fair at their organization.

So the next time you think that cutting back might help you improve performance, think about Wegmans and how the company fuels its workforce to achieve great results.

For more, read the whole story in our paper, The Five Hidden Barriers of Innovation.


Marcus Erb