Would you like to see more consistent growth and increased profitability in your department/ at your business? In this article you will discover a simple yet profound way to boost profitability and build a consistently successful business. This article outlines an approach that is found in Charles Duhigg’s book, ‘Power of Habit.’
Duhigg suggests that 45% of our daily activities are based on habits! He also says that based on research once an activity/pattern becomes a habit, you stop thinking about it, because your brain is wired to conserve energy. So how do you create lasting habits that will lead to success, when your New Year’s resolutions don’t last longer that a month?
Start by identifying a keystone habit at your business. (A keystone habit is any activity that has a disproportionate impact on other areas of your life or business).
First, start by identifying the three parts of habit formation:
1) Cue or Trigger – Charles Duhigg says, all cues fall into one of five categories: time of day, particular place, certain emotion, certain people or certain preceding behavior.
2) Habit or behavior itself – E.g. Company-wide meeting every Monday, checking your email every 10 minutes, logging in to Facebook, the company greeting when you answer the phone.
3) Reward you get from habits – affirmation from your employer/employees, peace of mind, boosted confidence, a piece of chocolate 🙂
Then, determine the keystone habit at your business:
When you identify a keystone habit at your business, make sure it aligns with the values of the business. As you diagnose the keystone habit in your organization, ask yourself, what are the values that bring people to your door? What do your employees care about? What do they worry about?
In his book, Charles Duhigg gives an example of Alcoa (Aluminum Company of America), a business that applied the concept of focusing on a keystone habit to bring about consistent change in their business. In October 1987, when the new CEO of Alcoa, took the stage of a ballroom in a New York hotel, he took his audience by surprise. Paul O’Neill had been a surprise choice for head of one of the world’s biggest aluminum product manufacturers.
In his speech to investors and stock analysts as the new leader of Alcoa, O-Neil decided to focus on worker safety, instead of profit margins and cutting costs. ‘I want to talk to you about worker safety’, he said. ‘Every year, numerous Alcoa workers are injured so badly that they miss a day of work. Our safety record is better than the general American workforce, especially considering that our employees work with metals that are 1500 degrees and machines that can rip a man’s arm off. But it’s not good enough. I intend to make Alcoa the safest company in America. I intend to go for zero injuries.’
‘I knew I had to transform Alcoa’, O’Neill said later. ‘But you can’t order people to change. So I decided I was going to start by focusing on one thing. If I could start disrupting the habits around one thing, it would spread throughout the entire company.’
O’Neill’s success at Alcoa is a great example of tackling a keystone habit to start a chain reaction, and as a result change other habits throughout an organization. Within a year of O’Neill’s speech, Alcoa’s profits hit a record high. By the time O’Neill retired in 2000, the company’s annual net income was five times larger than before he arrived, and its market capitalization had risen by $27 billion.
The employees at Alcoa were worried about their safety, so the new CEO decided to build a keystone habit around improving worker safety and learning from mistakes. According to Duhigg when emotions are in play, habits are most flexible. Since worker safety was an area of concern for the employees, connecting a keystone habit to alleviate those concerns, helped the employee’s latch on to that habit and succeed.
How to Try This at Your Business?
When was the last time you had a conversation with your employees, or took the time to understand what they care about or what they worry about? While it may take some time to figure out the answers to these questions, how you respond to the answers, could help you take your business to the next level.
To Get Started: Try These 5 Simple Steps for 30 Days:
- Understand the three parts of habit formation – They are a Cue (Trigger), Behavior (Habit), and Reward.
- Identify a keystone habit that if adopted would bring about significant changes in your business – Identify one positive habit you would like to adopt at your business. Does it align with your businesses’ core values and/or your core values?
- Make a list of things you do every day – Where can you stack your new habit? (see article on habit stacking below)
- Commit to practicing this new habit for 3 cycles of 21 days. That’s how long it takes to develop a habit.
- Remember it is important to reward yourself. The rewards don’t have to be big, but they do have to be something you like and enjoy. Once the habit is ingrained, you won’t need to reward yourself because doing the habit will become a reward in itself.
Read These Recommended Resources:
Read the book: Power of Habit by Charles Duhigg
Read article: Habit Stacking by James Clear
Let us know if you tackle a keystone habit at your business, in the comments below. Please share any insights you’ve learned along the way.