One of my favourite books is Dale Carnegie’s “How to Win Friends and Influence People”. In it he tells a wonderful story about how US steel magnate, Charles M. Schwab, used the power of information to inspire his workers to achieve previously unattainable levels of productivity. Here’s what he wrote:
Charles Schwab had a mill manager whose people weren’t producing their quota of work. “How is it,” Schwab asked him, “that a manager as capable as you can’t make this mill turn out what it should?” “I don’t know,” the manager replied. “I’ve coaxed the men, I’ve pushed them, I’ve sworn and cussed, I’ve threatened them with damnation and being fired. But nothing works. They just won’t produce.” This conversation took place at the end of the day, just before the night shift came on. Schwab asked the manager for a piece of chalk, then, turning to the nearest man, asked: “How many heats did your shift make today?”
Without another word, Schwab chalked a big figure six on the floor, and walked away. When the night shift came in, they saw the “6” and asked what it meant. “The big boss was in here today,” the day people said. “He asked us how many heats we made, and we told him six. He chalked it down on the floor.” The next morning Schwab walked through the mill again. The night shift had rubbed out “6” and replaced it with a big “7.” When the day shift reported for work the next morning, they saw a big “7” chalked on the floor. So the night shift thought they were better than the day shift did they? Well, they would show the night shift a thing or two. The crew pitched in with enthusiasm, and when they quit that night, they left behind them an enormous, swaggering “10.” Things were stepping up. Shortly this mill, which had been lagging way behind in production, was turning out more work than any other mill in the plant.
The principle? Let Charles Schwab say it in his own words: “The way to get things done,” say Schwab, “is to stimulate competition. I do not mean in a sordid, money-getting way, but in the desire to excel.” The desire to excel! The challenge! Throwing down the gauntlet! An infallible way of appealing to people of spirit.”
What Schwab understood was that information is power. He chose to share that information with his team using it as a way to coax enhanced performance. He intuitively knew that human beings are competitive creatures and can achieve fantastic things if giving the right tools and are motivated in the right way.
There’s a lesson here for every business. By sharing financial and performance information with your team you are empowering them to take charge of their jobs and to figure out ways to do things better and faster. This can only lead to positive outcomes.
The key is to get the performance measurements set correctly and then to get everyone talking about them. Then start publishing the results by sticking charts up in the office, factory and boardroom to measure progress. The great performers will love it and the poor performers will hate it and leave. But they’re no great loss anyway.
Charles Schwab achieved a 66% increase in productivity within two days by writing the number 6 on the floor of a factory – a simple gesture that had an enormous impact. Sometimes that’s all it takes.