With media in the US promoting that the US economy is recovering and US consumer confidence at an all-time high since the recession, a study from Gallup in collaboration with the US Council on Competitiveness released in December 2016 shows unequivocally that there is no economic recovery.
The study conducted by a Gallup senior economist, top Gallup experts and esteemed senior external scientists, found that since 2007 US GDP per capita growth is 1%. Unemployment may have fallen and certain business sectors maybe performing but America is dangerously running on an empty tank.
The study found that 3 main factors bear the brunt of this huge economic slowdown for the US. In 1980 Healthcare, Housing and Education claimed 25% of national spending. As of 2015 these increased to 36% of the total GDP, an astronomical cost. As the costs of these services rise, the value they generate – in terms of health, learning and shelter has stagnated or even declined.
When the quality to cost ratio falls, living standards do as well. The long term impact on Americans has been to dampen productivity, consumption, quality of life, ambition and career choices.
This falls squarely on the shoulders of leadership, both politically and in the private sector. America needs to take a hard right turn in regards to its current strategy for growth. Employee engagement has not changed over the last 10 years with extremely low global numbers of less than 20%. Management engagement figures are also low in the US according to Gallup with Men at 35%, while Women are at 41%.
Millennials which make up 40% of the workplace are having trouble connecting to companies Missions and are moving from one company to the next. According to Gallup when companies are able to find top talent and keep them this contributes to a 17% increase in productivity and 21% increase in profits. Improvements in employee and managerial engagement take it to an even greater level.
“Train your people well enough so they can leave, treat them well enough so they don’t want to!” – Richard Branson
When we get down to the nitty gritty, there are some basic problems in companies in every business sector that are not being addressed properly, affecting productivity and growth. The lack of growth in the private sector impacts the lack of growth of the GDP. We are all in the people business and it is clear that a majority of leadership in the US & around the world have not mastered transformational leaders and people skills as the stats above suggest.
Following are 3 things that leadership can do right away to address these challenges:
- Developing management engagement develops employee engagement – Attitude reflects leadership and a sure way to have disengaged employees is to have disengaged leadership. Take the time to have 1 to 1’s with your management regularly. Find out what is important to them, what drives them, how challenged or under challenged they are, how meaningful their role is to them and what needs to happen to make it more meaningful. Ask them to do the same with their own people.
- Create a solid bench of talented people – A compelling future is critical for employee’s engagement. Create a clear career path for the next 3-5 years for your employees. Look at what they aspire to be. Find out what they really want and take responsibility to support them in getting there. The people make up the company and its the company that makes the person. Create great people and therefore a great company.
- Communicate your Mission clearly – Your mission is how the company is making a clear and dramatic difference to your customers and the world as a whole. A leadership you MUST be 100% clear on this and to attract and keep talent communicate it often. People are motivated and engaged by feeling they are part of something that is greater than themselves and is making a difference to others. When they see how they play their part in this and they are recognised for it they will be super loyal.
In 2017, the opportunity is to learn from the lessons of the past and do things differently than the majority. A new growth strategy is required, one that focuses on people and performance, growing your business from the inside out. How will you make this real in the world over 2017 and beyond?