Library Drove Massive Revenue Increase in ’90s – Lesson Applies Today

Author: Mike Reid
Storyteller: Jim O’Conner, Head Librarian, Kennametal in ’90s

True Story – Several years ago, the CEO of Kennametal, a company with advanced metal cutting technology, had dinner with the CEO of General Motors. This was during the time that the Saturn automobile manufacturing plant was being established. In the course of the meal, Kennametal’s CEO said that he could guarantee in writing that none of his competitors would ever have metal-cutting technology more advanced than Kennametal’s.

The GM CEO was stunned, as this was such a strong and unequivocal claim and he asked the Kennametal CEO how he could be so sure.

The response was as strong as the claim. The CEO explained that his corporate library had:

  • Huge databases with scientific and technical peer-reviewed literature, grey literature, technical reports, patent information, and more, all updated monthly or faster.
  • Automatic “Current Awareness” services that let information professionals monitor the latest technical advances with full access to the right information.
  • The latest thinking from world-class experts collected from technical conferences around the world.

Kennametal’s CEO continued to explain he had created a culture where materials scientists, physicists, and engineers were all closely aligned with his information professionals.  The information professionals were expert in efficiently finding and delivering relevant content to help avoid known problems. The information professionals help select optimal development paths, and allow the company to be “smarter and faster” from design through development, to product delivery, maintenance, and operations.

The Kennametal CEO was pitching the impact and value of the library to the CEO of General Motors.

From this interaction, Kennametal successfully won the only “sole-source” contract for GM’s Saturn plant. As the only cutting tools vendor for the Saturn, Kennametal’s revenue growth was in the tens of millions of dollars.

To truly be Future Ready, you need an information professional. It’s that simple.

Are you driven?

Last night, the uniquely Portland bookstore “Powell’s City of Books” hosted author Daniel Pink, an engaging speaker and author of A Whole New Mind, Free Agent Nation, and The Adventures of Johnny Bunko.

I’d gained some real insight from Pink’s previous books and already purchased Drive—as the title is just so darn compelling. I’d also heard positive reports about this book from Jeff de Cagna at Principled Innovation.

So, what is it that DRIVES us? Of course, there are our biological drives: food, shelter, and finding a mate. And there are extrinsic drivers around rewards, such as our desire to obtain good things and avoid punishment—the carrot and stick.

But there are other intrinsic motivators and that’s really what this book is about. Yes, we need a paycheck, but we engage in work for a myriad of other reasons—because  it’s interesting, to contribute to serving a larger purpose, and to engage in a community.

In engaging employees, most business models stop at the extrinsic carrot and stick rewards. But, Pink says, this model works well only in a narrow range of circumstances, when work is simple and mechanical. It is not effective when creative solutions are needed. Humans have a mix of motives and, after a saturation point, cannot be manipulated to increase their productivity with more carrot and less stick.

In fact, Pink’s research found that when work requires higher level cognitive skills, higher rewards and punishments actually lead to worse performance. (Now you see why the subtitle of the book is “The surprising truth about what motivates us.”) When a problem does not have a clear direct answer, extrinsic rewards are not effective. Once you pay people “enough,” they want to engage by thinking about the work, not the reward.

Pink describes three intrinsic drives that motivate us: autonomy, mastery, and purpose.

Autonomy is the drive to be self-directed. Many business models require people to comply, but autonomy looks instead at engagement. For example, call centers typically time employee calls, monitor all employee actions, and put workers in “hamster cage-like, soul-hollowing settings.” As a result, turnover can be as high as 100%. In contrast, the shoe company Zappos implemented a different model. They give call center employees two weeks training that concludes with an offer of $2000 if the newly minted employee wants to quit. Interesting! For those that stay, which is the vast majority, their instructions are simple: “You know what to do; when customers call in, do it.” So the operators are free to solve the customer’s problem in the most appropriate way—which increased customer satisfaction. In fact, Zappos received customer service ratings equal to the Ritz-Carlton.  

Turning to mastery, Pink stated that as engagement is falling off at work, there is a rise in volunteering. People want to contribute. Open source software such as Linux, Apache, and Wikipedia are salient examples of this trend. People need interesting, challenging problems and will commit time and effort towards fulfilling this need.

How can a company engage our drive to purpose? Tom’s Shoes provides a relevant example as they give a way a pair of shoes to a child in need for every pair you buy. By doing this, they attract customers who feel good about giving and turn their customers into benefactors. To address purpose effectively, business models need to combine profit and purpose. People are not horses – we have the drive to make an impact on the world and a need to contribute.

Go read the book!  Then, let’s talk a bit more about intrinsic rewards.