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Profit at the Bottom of the Ladder

I just received my own copy of Profit at the Bottom of the Ladder – Creating Value by Investing in Your Workforce. I haven’t read the book yet, but our board member David Creelman has.  His reflections follow below:

Imagine two retail giants: Crown company and Foote company. Crown has a stellar top management team, 70% are A-players and 30% are B-players. Foote has only 30% A-players in top management. Now before you lambaste Foote there is one more fact you should know. Crown’s front-line workforce is 70% B-players and only 30% A-players; whereas Foote has a stunning 70% of A-players in those “low-skill” roles. Which company would win the competitive battle?

One can imagine a vibrant argument over who would win; an argument filled with the same passion as teenage boys debating whether Batman could beat up Spiderman. You can imagine the argument but you would never hear it because America has pretty much decided it’s the top jobs that matter. In fact, it’s widely believed the route to success is in lowering wage rates, even if that means potentially filling the working ranks with C-players.

However, there is a convincing argument that investing in superior talent in low-end workers is a winning strategy. Jody Heyman has gathered the evidence in the thought provoking Profit at the Bottom of the Ladder (Harvard Business Press). Heyman makes us wonder if the term ‘low skill’ job blinds us to the reality of what ‘bottom of the ladder’ workers bring to the organization.

This blog is not the place to review all the arguments but I hope you walk away wondering if a retail chain with superstar management could ever really beat a chain with superstar workers. If we refused to believe that those jobs at the bottom were ‘low skill’ and that investing in selection, motivation, training and retention were just as important as for management jobs then what would be wrought?

Most of us have had defining experiences with front line workers that have either made us raving fans or detractors of certain companies.  We’d love to hear your war stories.

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