Connecting The 3 Ps: People, Productivity and Profits

Posted on January 12, 2016 Updated on March 7, 2016

By Jim Funk

What is most important in your organization? People, productivity or profits? Many people look at the 3 Ps as independent or competing priorities; but what is often misunderstood is the dynamic connection between the three.

Let’s say you believe that profits are most important. It’s true that an organization can’t exist for very long without a black bottom line and a good return for shareholders (or financial stewardship in not-for-profits and government sectors). Or, if you say that productivity is most important because without it profits will suffer, that is true as well. Productivity is certainly a key to success.  But productivity doesn’t guarantee profitability or financial stewardship, because there are too many other variables involved.  And high profits may only demonstrate short-term success that could change in the future.

On the other hand, giving people first place in the equation may be altruistic, but it’s also logical. People have the power to do what is required to be productive, generate a profit and manage resources effectively. That’s why people are the foundation of the three Ps. The innate human ability to think, judge and act is the only way to drive business outcomes and reach organizational goals. The variables within people are capability, capacity and motivation. Leaders must attend to all three of those variables, not only in selection, development and recognition, but in the engagement of people in the vision and what it will take to bring that vision to reality.

First and foremost, leaders must make the mission and vision clear and communicate it on a regular basis. Where are we headed and why? When leaders understand people and provide what is needed in order for them to do their best, creativity, engagement and excitement are unleashed both individually and collectively. That energy is what drives increased productivity and innovation. This spreads beyond employees and engages suppliers, partners, affiliates and others, because people want to give their best to an organization and its leaders that give their best to people. This is not simply a “quid-pro-quo;” it is a true energy that cannot be defined by a social or legal contract – and it’s powerful.

Further, customers want to do business with the organization that puts its employees first because they sense and experience what it means to be treated as a person. This in turn increases market share and company profitability. In the not-for-profit and government sectors it increases effectiveness, efficiency and good stewardship of available resources. This is not to say that a sound business plan, strong fiscal management and the market forces of supply and demand don’t play an important part in productivity and profitability – that’s a given. But keeping the person in the center of the business or organization is just as conscious a choice, and is what makes the real difference to both productivity and profits.

Please share any comments, reactions or questions you have about these ideas. If you believe you are working or have worked in an organization with leaders like those I am describing, I invite you to write about it in a reply to this blog or contact me directly. I would like to talk with you. In my next blog post we will look more closely at what people need to be at their best.

Jim Funk is a consultant who helps leaders, teams and organizations discover and develop their full potential. He is passionate in believing that strong leadership competence combined with the leader’s personal characteristics, values and virtues are key to achieving goals and driving business results. In addition to his work at J L Funk & Associates, Jim has served on various boards and commissions, and is currently a member of the Economy of Communion in North America Commission. Learn more about Jim’s work at www.jlfunk.com and www.linkedin.com/in/jlfunk or e-mail him at jim@jlfunk.com.