I've told you all of the problems with the partnership approach. It sounds challenging. I'm going to need to invest, I'm going to need to invest more in training my people, I'm going to invest in these motivation things. I need to trust them in order to give them more as decision-making path. Now, you're telling me that in addition to all of that, I'm going to do more the same time or else it won't work terribly well. This point you're asking, ''Are you sure I should be doing this?'' My answer is yes, I think there is strong evidence that these practices really do lift organizational performance. What's my evidence? We can certainly look at different organizations that have done this. In retail, Trader Joe's, I've talked about an American retailer, incredibly efficient. Wegmans is another one that comes right at the top of the customer satisfaction metrics and also continues to do well. Costco, which is a wholesale club, also been very successful and expanding while treating its workers in a way of really partnership. You could also look beyond obviously the retail sector. Southwest Airlines, which is beam by a mile, the most financially successful airline within the United States. Is really a pioneer of this continued succeed over decades with this approach, Nucor still. There are a lot of organizations that we can point to that have really taken this three-part partnership strategy and run with it and really being successful. We can look at these, we can look at other organizations that may be less verticals like Walmart. Walmart is not really know for the partnership strategy. They've been incredibly successful. Maybe there are organizations that don't do this. It's certainly true. You can look at many organizations that had been successful without these practice. Without say, Walmart is an interesting case, and I'll talk a little bit about this in the next module. There's a lot of evidence that overtime they're trying to move to more towards a partnership model, particulars they think the growth of online retailing, means being able to improve the customer experience, is becoming more and more critical for their organization. But I think the base of knowledge about why these practices are important goes well beyond, this store does this, this company does that. So there are a lot of studies that looked across different companies here, and many sectors to really systematically understand how does the way that they manage their people affect their returns, and they tell a very consistent story. One of the classic studies was done by my colleague John Paul Muck Duffy in automotive looking at different automotive plots to see which ones are most effective, have highest productivity. There they found consistent with some of the stories I was telling for the ones that we're following this Taylor's process, not doing so well. The ones on the other hand that adopted this partnership, really investing in skills, really investing in practice, develop the commitment and motivation in the workforce, they were systematically more productive, particularly when they combine it just in time and other manufacturing process. Same thing with steel finishing. I don't know why people choose some of the sectors that they do study, but somebody did [inaudible]. Researchers did a very nice study of steel finishing lines, and found again that those that invested in these kind of partnership practices were more productive. We have seen that garment manufacturing. People have seen it looking at medical equipment manufacturing. Some leaders study of the Fortune 500, to understand which are the companies that have the best financial results. Again, we found that those that really investing particularly in more skills in their work force, in more motivation, they offered higher financial returns. There's a study of retail banking. They looked at those bank branches where employees had higher satisfaction with the management, felt more recognized and rewarded, those the ones that had the highest loan growth. There's another study that looked at retail store specifically, we tell him Finland, of all places there they looked at which stores invested in participatory management, and found that those that really did engage in participation, participatory management, those had higher returns. If you look from study to study, you see the same idea of those organizations investing in these partnerships style arrangements. This abilities, motivation, opportunity enhancing practices do best. Here's yet more evidence, has been enough studies of these 92 overrule those just by 2006. Really trying to understand here, is there a relationship between how people managed in performance? The bars that I have up here, these come from what's called the meta-analysis. This is when a team of researchers go back through all of the studies that have been doing and look at the patents and try and draw out. If we look across all of these, what overall is the relationship between some of these variables and performance? What I've got here are correlations, so I don't know how long it is since you last did your statistics. Correlations go from minus 1. These things are perfectly negative unrelated. When one thing goes up, the other one always goes down to zero. There is effectively no relationship between this whatsoever, all the way to one. When one of these variables goes up, the other one always goes up. The correlations you're seeing here are around 0.1. These are significant. They're not vast, but on average, what they show is that with all of these different organizations, when they did more of these practices the hiring, the training, the promotion, figuring out how they were going to actually get the right staffing levels. On the reward side, things like incentive compensation, high-paid, like I mentioned, deployment, security, and so on, and this kind of participation and teams, all of these things, the organizations that did these were systematically higher performing. We see at that bottom, Bonnie bother really big one bundle. What is bundle? Is when they do all of these together. When they're treating them as compliments. Like that answer? One thing I really want you to take away from this, there's a huge amount of evidence that adopting these partnership arrangements works at moving from Congress. How do we drive down costs? Just think about how do we treat our employees as partners? Make sure they're skilled, make sure they're motivated, and make sure we really give them the tools to help us improve. Then in those situations, organizations are ultimately more successful.
