The Hidden Drain on Your Bottom Line: Unused Human Capacity

On this episode of Great Talent Great Business, Rob Levin interviews Bob Borcherdt, Founder and CEO of IN2GREAT and discuss how you can unlock the hidden potential within your organization. Bob delves into the root causes, emphasizing the critical role of leadership development and the creation of cultures of clarity. Learn how fostering better leaders and clearer expectations can drive employee engagement, boost productivity, and ultimately impact your bottom line.  

Key Takeaway: 

Leadership development isn’t the job of HR, consultants, or training programs—it’s yours. To unlock your team’s full potential, drive engagement, and boost profitability, it must be intentional, ongoing, and embedded in daily work. 

It starts with creating a culture of clarity—where expectations are clear and feedback flows both ways. People know exactly what’s expected of them and are set up to win. Without that, businesses operate with unused human capacity that directly impacts productivity and retention. 

The best way to develop your people? Meaningful one-on-one interactions that focus on their unique strengths. When your people win, your business wins. 

 

Questions I ask Bob Borcherdt:  

[02:40] Tell us about this concept of the unused human capacity that exists in every organization, and what does that mean to businesses? 

[08:20] Could you provide some examples of what this unused human capacity might look like in a typical small to mid-sized business? 

[10:01] Can you elaborate on what culture of clarity means? 

[12:27] Is it critical for a company to have clarity on its goals at all levels to avoid this unused human capacity?  

[13:46] When working with businesses to tap into their unused human capacity, what is your initial approach? 

[15:37] How does the Predictive Index work, and how does it help identify and reduce unused human capacity? 

[17:23] How does data from the Predictive Index improve communication and operational clarity? 

[20:38] What major workplace culture shifts have you seen, especially with Gen Z and millennials, and how should companies adapt?  

 

More About Bob:  

Check out IN2GREAT 

Connect with Bob on LinkedIn. 

 

More About Rob Levin & WorkBetterNow: 

Like this show? Click on over and subscribe to our YouTube channel! 

Visit WorkBetterNow.com 

📥 Download the free worksheet for this episode HERE and subscribe so you never miss an episode! 

 

Episode Transcript

Bob Borcherdt (00:00):
We believe, and it's documented, there are underdeveloped leaders at all levels in an organization, whether that's executive management, supervisor, or even individual contributor. What happens then is that creates what we call organizational confusion, and that results in disengaged, underdeveloped and unfulfilled employees, which directly impacts our performance, our productivity, and our profitability.

(00:01):
Subscribe now to never miss an episode. For more resources, visit GreatTalentPodcast. com, where you can download this episode's free worksheet designed to help you apply today's insight to your business. And now, here's your host, Rob Levin.

Rob Levin (00:02):
Fantastic. Bob, let's start here. In your book, Leading to the One, you talk about this interesting concept of the unused human capacity that exists in every organization. Can you tell us a little bit in terms of what you mean by that and where it exists in an organization and what that actually means to businesses?

Bob Borcherdt (00:03):
You won't find it in GAP, right? It's not a generally accepted accounting principle. But the interesting thing, Rob, is the follow-up question then. Do you have unused human capacity in your organization? 100% of the time, they say yes. Intuitively, we just know it's there. We have a hard time putting our finger on it and measuring it, but we even have a harder time figuring out how to access it.
And so that's the work we do, and I think one of the things that I've noticed in our industry, in the leadership development industry, I think we have a really bad habit of treating symptoms and not root causes. And the reason is because symptoms are a lot more profitable. It's like most industries in general, right? It's just more profitable to treat the symptoms than to really help people get below the surface to the root cause, and so it's the easy route. And so we kind of see the root cause of this issue in four areas. We believe, and it's documented, there are underdeveloped leaders at all levels in an organization, whether that's executive management, supervisor, or even individual contributor. What happens then is that creates what we call organizational confusion, and that results in disengaged underdeveloped and unfulfilled employees, which directly impacts our performance, our productivity, and our profitability.
And let me just give you 3 statistics. With underdeveloped leaders, research done by Gallup on 3.3 million employees at 180,000 business units, found that poor leadership leads to 20% lower productivity, 23% lower profitability, 50% higher turnover, so when we talk about the turnover problem, what's really the root cause of a lot of that, 63% more safety incidents, and the performance of a team is 70% correlated to the effectiveness of the leader. So we just don't have leaders deep enough in our organizations to really attack those issues, so you can see how that would impact the financial success of an organization. In the area of organizational confusion, just one item, one item alone, communication in research published by Sherm, in larger corporations, it's $12,500 per employee in the area of poor communication at a salary of $67,000. So that's 18% of a person's salary; we're going to be impacted in our organization by that amount in large organizations just by poor communication, so think of the confusion in the noise, you know, running in the systems, right?
Smaller companies, 100 employees and less, it's $4,200 per employee just at that level, just one thing in the organizational confusion, and then we're all familiar with Gallup's information on disengaged employees. It's probably costing us 1. 9 trillion right now in lost productivity. What a 34 million full-time workers right now, that's like $14,000 per employee. So you can make a case pretty quickly, that there's significant financial impact, and those are areas where we see unused human capacity. And so we believe, and this is the process we take our clients through, let's build better leaders at all levels, let's create cultures of clarity.
Yeah, I would say it's our focus is going to be on creating what we call these cultures or environments of clarity in these organizations. And so, Rob, it's really interesting, the impact is the same at a small company versus a big company, it's just that a smaller company, we're probably talking about an owner and the owner's leadership team, versus in a bigger size company, you've got multiple teams. And so we actually have defined culture a little bit differently, we talk about it in terms of micro-cultures. So if I have a small business of about 25 employees, I might have a culture; if I'm in a business of 1,000 employees, there's many cultures because cultures are led by leaders or business owners, but the principles still apply, and the financial impact is still the same.

Rob Levin (00:08):
Okay, so, Bob, can you give us some examples of what this might look like? So you explained the financial impact, which is significant, but give us just as people can touch and feel this a little bit. What are some examples of what this might look like so we can most likely get a few people's heads nodding going, Oh, okay, now, yeah, this, I see this in my company.
Yeah. I think of it as look, I've talked about this, it's all over LinkedIn. In terms of posts, we talking about the Gallup polls and a lot more. There's clearly some generational differences, right? In the workplace; we have previous podcasts with Jon Sheppard where we talk about this, but I still think that as the business owner and especially in a smaller business where every single seat counts, you have to make sure you're doing your part to make sure you're setting the stage for an environment where it's very clear on what people need to do and where we're going and the tools and all that stuff.
We really set the tone for that, so we created what we call the Clarity Model, and what we mean by that is there's three things that we can focus on to drive clarity in our organizations or drive out confusion. One is higher levels of awareness, and that's awareness of ourselves, others, and the situations we find ourselves in, and that's well documented, in the leadership space, high levels of self-awareness. Secondly, we believe expectations are important, so awareness and expectations, the greatest source of frustration is an unmet expectation. Well, what if I, as the business owner, don't do a really good job communicating those expectations, or what if I have them and it's not really a fair expectation for that employee, what if I have that employee in the wrong seat, right?
And I don't really even position them as a place to win, and so if you look at my, what we call my behavioral design, I'm going to thrive in certain environments and I'm not going to thrive in other environments; but if I don't know that as a leader, how do I create the space where this person can actually win, so then I end up expecting things of Rob that are totally unrealistic, and that leads to deep levels of personal frustration. And then thirdly, the third part of the model is feedback, so awareness, expectations and feedback. We just think people have a right to know where they stand, and by the way, all of that is bidirectional; because if I report to you, Rob, I have expectations of you as my leader. Do I have an opportunity to communicate those? Do I have the opportunity to give you feedback? So it's not a one-way thing, and we just see a lot of that missing, we don't see it being very bidirectional. We don't see expectations really being very clear and realistic and fair, putting the person in a position to win, and then I think feedback's tough, and so we use behavioral data to help us understand. How does this person like to receive feedback? How are you going to give feedback? Are these fair expectations of this person? So the clarity part of this is built around what we call the clarity model.
First of all, is it clear on what we're trying to accomplish? This week, you know, this year even right or even in a long term the long term future of the company. Is it clear what we're trying to accomplish? I know at my company It's how many Certified Professionals™ like we have this one number that we get the whole company related on, but you can't stop there you have to go into each department and of course, it's not necessarily the owner, but the department heads have to go into each department and make sure it's clear that we know what the department's role in this is, and then each person in the department, what their role is, for the greater good of whether it's one number that you're tracking or whatever other things you're tracking in the company, and I found that we run on EOS on the Entrepreneurial Operating System that certainly helps, but you still have to connect all the dots and it's a lot of work, but the impact, and I guess you're alluding to this, the impact is huge.
Do I actually have them in the right roles to execute that? And how would I even know that? And so that's a space we spend a lot of time working with our clients.
Well, we weren't all the same types of players. So leading to the one is as a leader, I got to get to know Rob at a much deeper level if I'm going to lead him effectively, because if I have Sarah over here on the team as well, I may not be able to lead Sarah the exact same way that I lead Rob because they're totally different individuals; and so the way we interact with each other is going to be very, very different.
I know that your company, IN2GREAT, uses an assessment called the Predictive Index. Talk to us a little bit about how that works and what's the relationship between that and the unused human capacity?
And that's where the behavioral analytics just becomes critically important to us, it shows us, here's who this person is, here's the type of leaders, nine leadership styles, here's the type of leader they are; now I can put them in an environment to succeed, because if Rob and Bob are very different leaders, it's not going to be the same.
So, help me connect, and let's help the audience connect the dots here. You use this assessment to get a good understanding of the leader, characteristics, strengths, weaknesses, unique abilities. How does that then translate into the whole communication? Create that bridge for us; how does that reach over to the communication side of leading to make sure that there's not unused human capacity, and we're operating efficiently, and there's clarity on what I need to be doing as somebody who works in one of these departments.
That's what we end up doing, so if we can't learn to communicate in all four, which is the best way to do it, or if we don't really know how this person on my team likes to receive information; if I'm speaking English and they only understand German, I got a real problem. And that's kind of how it ends up being confused and confusing on the communication stage.
I gave myself a title many, many years ago of being a drive-by delegator, and I also love the term, when I was in business school, I had this, professor who's a very well-known entrepreneur guy named Peter Guber, and he mentioned that this term, this was, close to 30 years ago, that still sticks with me, which is mutual mystification. We both walk away from a meeting without having a, slight clue of what we're supposed to
Bob, let's kind of jump to a topic that we briefly touched upon, which is, you've been doing this for a little while. What are the changes that you've noticed in terms of, workplace culture, the different generations in the workplace, the Gen Z, we've all read about, Gen Z and millennials, and let's just say that they work differently than us. What are your observations, and what should companies be doing about this, about dealing with the fact that these, the younger generations work differently?
And so it typically isn't even a whole age group. But I think that's why Leading to the One is so critically important, because whether I'm leading somebody that's 60 or somebody that's 20; if I don't know that person and how they work best, and what really motivates them and where they're going to thrive, I'm probably going to work with the 20 year old differently than I am the 60 year old. Right? So, leading to the one becomes critical, I can't lead to generational groupings; I have to lead to the individual that's on my team.
You mentioned earlier, it's kind of common sense. And we see that a lot. It's just not common practice. The secret is how do you take something that's common sense and turn it into common practice, and so here's what I would encourage small business owners, leaders in small organizations or large organizations, it really doesn't matter, I think the first step is, take responsibility for the fact that you as the leader are responsible for the development of your people. It's not HR's job, it's not a consultant's job, it's not a coach's job, it's not sending them to a seminar; it's not any of that, we have to rethink the way we develop people.
We can't lead like we did 30 years ago, we can't even lead like we did five years ago, and so we just believe the leader has to step back into that role from the CEO on down and take responsibility for the development of his or her team; and that will cascade in the bigger organizations as they do that.
Yeah. And I'll just close with this final remark, which, in my experience, doing things like this, like everything that we've talked about, really getting this whole concept of leading to the one can make a significant difference, not only in the financial results of the company, but it just becomes a lot more fun from the, for the owner and everybody else in the company.
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