From the site The Coming Jobs War:
What everyone in the world wants is a good job.
Today, this statement makes vivid sense.
In a provocative book for business and government leaders, Gallup Chairman Jim Clifton describes how this undeniable fact will affect all leadership decisions as countries wage war to produce the best jobs.
Under Clifton's leadership, Gallup has expanded from to a worldwide organization with 40 offices in 30 countries and regions.
Clifton is also the creator of The Gallup Path, a metric-based economic model that establishes the linkages among human nature in the workplace, customer engagement, and business outcomes. This model is used in performance management systems in more than 500 companies worldwide.
Mr. Clifton joined the show recently to talk about the book, his book, and what it means for us. You can listen here.
You can read Part One of our conversation here.
You can read Part Two of our conversation here.
Now, what’s more important? The idea or the person behind the idea.
Those might be separate. But if somebody brings an idea to me, I want to know who is going to make it work.
But, every once in awhile, you run into somebody...I use the example of Dr. Gallup’s book. He told me a story of a guy came into his office and said:
“Let’s start an advertising company.”
Dr. Gallup said:
“No. I’m not really interested in advertising.”
And that was David Ogilvy. And, of course, he built one of the great advertising agencies ever.
People will get that mixed up. They’ll go:
“Oh my gosh, starting an advertising agency was such a good idea.”
No, no, not at all I guarantee whatever idea david Ogilvy picked was going to become big because he’s one of those 3 in 1000.
I always use the example of Ted Turner. I never knew him very well. But CNN’s been a very good client of Gallup, was for a long time while he was there. I did some research on 24-hour news. It’s not that good of an idea. It sounds real good, but it’s about the same as the idea of, I helped with this years and years ago, banks would close real early in the afternoon, like a t 3 o’clock. We said you should stay open longer so people who have jobs can use them. You see how stupid an idea that is?
But, what Ted Turner decided was:
“Let’s put news on all the time.”
Because people always had to wait until exactly 6 o’clock at night to watch Cronkite or whomever it was. It was really a hard-working idea. But Ted Turner picked the idea and now everyone goes:
“Oh my gosh! I wish I had picked that idea of 24-hour news.”
That’s the wrong analysis. Whatever idea Ted Turner picks becomes a big idea.
And maybe you read this idea in there, I don’t know. But, he’s recently picked buffalo ranching. And that is not a good idea. He butchers the buffaloes and then he sends them to these Ted’s restaurants and you eat buffalo meat. But, Ted will probably make it work because he’s one of those 3 in a 1000.
Remember, I believe that innovation is really, really important. But it never turns into jobs, it never turns into GDP growth, until it connects with entrepreneurship. And the rare entrepreneur and the rare business model are much more scarce. And that’s why you gotta remember those lie within individuals and not intellectual models.
Beautiful. And in your book you list more examples. One I really liked was Wayne Huizenga of BlockBuster Video, owner of the Miami Dolphins and Waste Management. He made those ideas come to life.
If one person can make a difference, a group of people actively engaged in bringing an idea to life would make a huge difference? But Gallup has been a leader in reporting that only 28% of the employees are engaged in their work. What effect does that have on our GDP?
Well, here’s the thing. Let’s say there’s 100 million people in real jobs. Therea re abut 100 milloin that have 30-hour, steady jobs. It really blows me away then that only 3 in 10 of us in the US really enjoy our work and get a kick out of serving customers. You and I both have customers. And feel like we’re both making a difference.
Here’s the thing, though. That 30% is what actually builds customers. And the more customers they attract, the more employees you need to hire.
At the other end of that contiuum are 20% of the people who came to work who are really miserable. Our scientists at Gallup call them ‘actively disengaged’. They’re not really just miserable themselves. They hear someone’s feeling good then they go sit with them until they feel bad, until whatever inspiration they had goes away.
And if you want to find bad customers, they’re wherever that 20% goes because they treat customers like hell. So, you got 30% of your employees building your business and 20% tearing it apart and in the middle you got 50% that kinda just don’t give a damn; They’re lining up lunch or figuring out breaks or whatever.
But, that 30% engaged is really important because they get all kinds of ideas and business models and they’ll determine which businesses keep growing, especially organically.
Another thing, those high-spirited workplaces, those people will opt-out and start businesses themselves. At Gallup, we’ve had 100 businesses that have spun out of Gallup. If you go back to IBM, IBM has spun out tens of thousands. Google has spread out, is popping out companies, and that’s great; you want that!
But, they come out of highly energized workforces, not the dead ones. That’s why the book, when you run a dead workforce you’re not only hurting your shareholders and your employees, it’s bad for America as well. We won’t get GDP growth from poorly run businesses.
Gallup has a path to correct this problem of low percentages of engaged employees. I think we mentioned it in the intro. It’s called the Gallup Path. Walk us through that 8-step path.
Well, what we were trying to do is to try and determine the role of human nature plays in business outcomes. The thing a real financier or investors on Wall Street or people want are stock increases. And stock increases are best predicted with profit increases. So, that’s the 2nd one.
What drives profit increase 80% of the time is sales increase. So, if you want to go work on something at your radio station or me at Gallup, if you can have sales increase then 80% of the time you’ll have profit increase and then share increase.
What’s the best predictor of sales increase? Well, it’s basically customer satisfaction. But, it’s customers that feel they’ve got a real partnership with your organization. Whatever you do, whether it’s your radio station, Gallup or this coffee shop. If it’s this coffee shop, is it something I stop in everyday before work or where I meet friends.
If the level of engagement is somewhere around 20% what we found is that if you can double the amount of people who really rely on you, then sales will go up automatically, then profits and stock. And you gain more customers....and a lot of people figured that out not just Gallup.
What Gallup figured out is the next step. If you can’t see any of those statistics on that algorithm, then the best predictor is the number of engaged employees you have. So, if you have 30% engaged and you raise that to 50 or 60 like good companies do then you’ll automatically get more sales, get more profits and higher stock prices.
What we found was that the single most important thing you can do, if I come to your radio station, you’ve gotta get me a job where I actually have the capacity to perform.
So, let’s say I’m an introvert and what I really like to do is work on my computer and build software and I come and say:
“That’s what I do, Zane.”
And you say:
“Well, good. We’ll put you in sales.”
“I don’t like to meet people; I’m afraid of small talk. Then you’ve given me a job where I have no chance.”
And you say:
“Well, that’s alright. I’ll give you training. I’ll give you Dale Carnegie course.”
We found all that only makes it worse. You gotta actually mathematically describe my strengths. You gotta give me a job at your station where I create the best technology you’ve ever seen. And then you’ve given me a job that uses my strengths.
And unless you do that, you can’t give me the algorithm to fire.
The next and last thing you have to do is give me a boss that cares about my development. And when you do that then you’ve created an unusual organization, one that will have continuous growth and all that.
But, that’s where we found the role of human nature or what many people call behavioral economics.
Now, you walked into it in Chapter Eleven. It’s titled: Fix Healthcare or Destroy Job Creation. If that was your only chapter I would love this book. The connection is so obvious and so lost on so many. What’s the connection between healthcare and job creation?
Did you ask me about the role healthcare plays with job creation?
Well, I’m just trying to think how I can make this as short as possible. The problem with healthcare is that the total cost of that for a year is $2.5 trillion. So, it’s way more than the war in Afghanistan and Iraq and all that; the number’s huge. It’s the single biggest cost we have.
Now, and Washington reports that it’s growing at 6.2%. So, we already can’t afford it and it’s growing about as fast s anything else. If you do the math on this then the $2.5 trillion will be $4.5 trillion. And if you add the increases over ten years from $2.5 to $4.5 trillion, then it’s $10 trillion above what we already don’t have.
And you’ll never hear, and nobody on either side of the aisle talks about, but we have a $10 trillion increase coming and the subprime market was only $3 trillion and it wiped out global markets. But if you think of it as tsunami, that was a 3-story tsunami with sub-prime. The healthcare tsunami that’s coming is 10 stories tall.
And the party’s pretty much over if we don’t fix healthcare. And on one in Washington is doing anything. All those laws are about how you move money around. It’s not about decreasing it. It’sgoing to be growing like a big monster.
The US is wealthy. We spend about $8000 per year per person on healthcare. Other big countries like Germany and France only spend about $4000 per person per year; that’s where we should be.
And I know you probably say:
“Well ours is better quality.”
No, no. Don’t say that so quickly because we die faster than they do. So, whatever the hell’s going on, the $2.5 trillion isn’t saving us. All 4 of those countries’ citizens live longer than we do. I don’t mean to be cynical but god you gotta wonder.
Great points. I’m sitting here shaking my head. The numbers are so obvious and the points are so clear and yet nobody’s really coming up with a oslution, a business model that addresses the challenge.
This could be an interesting segue. We've reached the imagination moment in our show. Let's imagine President Obama has some interest in creating jobs now. And it's an interest he may pursue with some conviction in the face of resistance. He picks up his Blackberry and calls you.
Jim, he says, because he's the President.
Some of us here in DC have heard that there may be an unemployment problem here in the US, outside the Beltway. And some of us see job creation as a key aspect of our national security. But we still have this problem.
We want to hear your thoughts, maybe 3 things that we as a nation can do to avert the danger that has not yet come, win this war now before it becomes a war, and create good jobs on a sustainable basis for the next 30 years.
What do you tell him?
Well, I’d say he’s got to focus every decision, every policy he makes, on small to medium-sized businesses. I’m going to call them ‘business builders’. Now, we’ve got a lot of people that need to be taken care of from the aging to unemployed to union workers and all that kind of thing. If he doesn’t consider business builders in every decision that he makes and he doesn’t lighten their saddle rather than make it heavier, we have no chance at all. We will not have sustainable growth with ‘shovel jobs’ or by propping the place up.
We have to have organic job creation that comes from startups and shootups. Or we will not retain our leadership of the free world. That’s first.
The 2nd thing is that the emphasis has gotta be put on entrepreneurship not innovation. And we’ve got to develop all of those sciences. Put your billions into that not innovation. We’ve got enough innovation. We’ve got innovation on the shelves all over this country.
But, the 3rd thing is we gotta make it intentional that cities are the places where these chicks can hatch because that’s where all the variation is.
Those would be the three things right now that would come out of our conversation.
And I appreciate this conversation very much.
Thank you for that. Your answer was very concise. And it’s music to my ears when you talk about the role of small business in creating jobs andcommunities and sustainable economies.
Leaders are readers. Jim Rohn says that. I just quote him. You're a leader. What are you reading in all your free time?
But the reason I say that is the best thing the US can do, I can’t give a very good report on that right now, but we’ve got to figure out how the whole Middle East is a market of ours. I like to pick magazines and publications that are doing some real extreme thinking about how we can have business partnerships in that part of the world.
We have some. But you take a company like Mars candybars. God, I love companies like that; they’re selling candybars and things like that. You know the friendship that they develop with that? There is nothing more respectful in the world than American business like Mars, but I shouldn’t say names of companies but they come to you and say:
“We’d like to go in business with you and have you handle our pet products.”
And everybody gets excited. People forget about religion and occupation and all that.
I’m trying to do as much reading as I can to figure out how the US can have a different relationship with the whole world, rather than having one driven by military or political force but by business force.
That’s what people want. They want jobs.
That’s such a beautiful point. In that common goal of having a job you address all the primal needs that humans have. Welfare, security, an opportunity for our family to grow, an opportunity to thrive and reach our dreams for our children. And it transcends all of these other areas.
Thank you for sitting in a coffee shop in order to do this interview.
Thanks for having an interest in Gallup and our research.
Thanks for being such a good friend and partner with Gallup. That means a lot to me.
Can you leave us with one final quote on The Coming Jobs War?
I’ll leave you with one of America’s most influential list. A famous Iowan, named Dr. George Gallup. He said that:
“If democracy is about the will of the people, somebody ought to go find out what that will is.”
There’s genius in that remark. The answer to that question right now is:
“The will of democracy right now is to have a good job. So, we oughta go fill that need if we want to hold the republic together.”
Thanks for taking the time for this conversation! Thank you. This has been a delight. And all of the guests from the Gallup organization I have interviewed on this show have been a delight. Tom Rieger with Breaking the Fear Barrier, Brian Brim with Strengths Based Selling and Tom Rath with Wellbeing. All great books, well-written with ample research and actionable steps and the authors were great guests. Thank you!