It is not only a cliche to say “people are our most valuable asset,” but it is also inaccurate. First, people are not “assets” owned by the company, and talented people won’t work for leaders who treat them like chattel. Employees are sovereign human beings and stakeholders. IF people were assets, then no doubt they would be the most valuable assets. Second, all too often leader decisions, policies, and behaviors tell a very different story. Instead of valuable assets, leader actions often tell a story of employees as an expense to be minimized and leveraged to extract all the productivity possible to maximize profit. The problem is that is the modern-day equivalent of killing the goose that laid the golden egg. In a well-designed leadership system, people are the “bridge” between strategy development and strategy deployment. While we often present the strategy process activities in a sequence, in reality, the assessment of the workforce capability and capacity is also an input into the development of the strategy.
High performing organizations are designed to support employees as whole people not just “factors of production.” Not only is it the right thing to do, but it is the logical thing to do. If you take a systems view of the organization, you will find that highly qualified, passionate, engaged workers create great customers experiences. Customers then come back and spend more (repeat business) and bring their friends (referral business) which grow the top line and creates value for the investors. This is not a new idea and supported by empirical evidence. The only explanation I can think of for leaders who don’t seem to “get it” is they lack an understanding of the system, have a short-term perspective, or both. Or worse, they do not care; a combination that is a recipe for poor organization performance.
Developing the workforce is a strategic leadership responsibility. A strategy without a capable workforce is a fantasy. One of my favorite quotes which has been attributed to various leaders including a few CEOs of Baldrige award recipient organizations is the response to the question, “what if you spend all that money on training people, and they leave?”
What if we don’t train them, and they stay?
Research shows there is a clear linkage between workforce development and engagement and firm performance including profit. In addition, it is a waste of time and dangerous to empower and engage people who are not qualified. Maybe the best approach is one offered by Richard Branson, who proposed that we should,
Train people well enough so they can leave, treat them well enough, so they don’t want to.
Empower and Engage
Only qualified employees can be empowered and engaged to make the strategy a reality. Over 20 years ago I proposed that,
Empowerment is a combination of motivation to act, authority to do the job, and the enablement to get it done. Enablement requires a vivid picture of the destination (Latham, 1995).
It might seem MAD, but many organizations develop great people and then put them into the equivalent of an organization “straight jacket” that inhibits their creativity and performance. Leaders can’t succeed by micromanaging yet that is exactly what they often attempt to do. If you have to micromanage employees, you have either hired the wrong people, failed to train them, or both. What is needed are leaders who create an environment that supports the employees reaching their full potential so that they can deliver great products, services, and experiences to the customers, both external and internal.
Unfortunately, when faced with short-sighted decisions regarding employees, all too often one hears the excuse, “it is a business.” Yes, a BAD business. When leaders use the excuse that it is a business to justify short-term decisions that end up reducing longer-term performance and profitability, they are once again demonstrating a lack of understanding of the organization system and a short-term focus. Or, it could be that they know it is the wrong decision, but they lack the courage to advocate for or do what is best for long-term performance. We need leaders who can produce short-term results without sacrificing longer-term performance. Leaders with the character and courage to do what is in the best interests of all the stakeholders.
I had a great time yesterday talking about these issues with Dr. Milan Larson’s MBA class on Strategic HR at the Monfort College of Business, University of Northern Colorado. Download the Discussion Handout we used to frame the conversation.
Enjoy the journey,