Image credit: Lattice
By Anda Goseco & Wallace Pond
Most organizations claim that people are their greatest asset. When those claims are actually true, those businesses, schools, institutions, etc. benefit from the single greatest competitive advantage possible—an advantage that cannot be commoditized or easily adopted by competitors.
So, what sets apart businesses and other organizations for whom human capital is their greatest resource?
First of all, those organizations are led by people who understand that human capital is as valuable and usually more valuable than any other kind of capital or asset. As such, they are as strategic about people as they are about the business itself. They invest purposefully in human capital development, which includes both professional development and personal wellbeing.
Such leaders focus on people before numbers because they know that whatever the organization’s key performance indicators are, none will be achieved without the commitment and productive engagement of people. The simple truth is that there are always people behind the numbers.
People-focused leaders have also discovered that in addition to achieving strategic and performance objectives, focusing on human capital provides direct, tangible benefits such as increased employee retention and much greater engagement by those retained. In effect, these organizations get the trifecta of experience (long tenure), engagement (productivity and quality), and dedication (loyalty and advocacy) from their employees. Specifically, when people are engaged at work there is 21% higher productivity, 37% lower absenteeism and employee turnover, and 22% higher profitability.
When leaders see people as their most valuable assets, they find ways to support them and bring out their strengths, but what is required for the many leaders who are not yet as people-focused as they need to be?
Who Are You as a Leader?
The first task requires taking a good look at your current strengths and purpose as a leader to determine to what extent those strengths actually support people. Do you understand human capital? Do you see employees as an investment to be maximized or a P&L expense to be minimized? Is your emotional intelligence well developed? Can you express empathy and compassion? Do you pursue success through self or through others? Do you always have to have the answer? Do you listen to respond or listen to understand? Do you hoard information or share it? Do you micromanage others or empower them? The answers to this short list of questions can paint a picture of the extent to which your current leadership profile is people focused or process focused. You can see a more comprehensive lists here.
Do You Have a People Strategy, and if So, What Is It?
Do you invest in individual experts or highly effective teams? Are your primary HR activities designed to measure behavior and rate performance or support personal and professional growth in your employees? Do you encourage diverse opinions and healthy conflict? Are you strategic and purposeful about Equity, Diversity, and Inclusion (EDI) or is it a “side bar” initiative? Is your organizational culture aligned with your professed values or is there a “hidden”culture that drives behavior? And maybe most importantly, do you actually know what your people need to feel connected, engaged and successful or are you projecting onto them what you think they need?
Maslow’s Hierarchy of Needs
Although common in education and psychology, a very famous developmental/motivational model of human needs that is rarely used or understood in corporate or other organizational settings is Abraham Maslow’s Hierarchy of Needs. Maslow described his theory as a hierarchy of ascending needs, with the most basic at the bottom of the list and the highest-level human need at the top. This can actually inform inquiry into the extent to which the needs of people in the organization are being met or not. We have developed an instrument for assessing these needs in an organizational setting and invite you to contact us at either of the email addresses below for more information.
While the most basic physiological needs are typically not the direct purview of an employer, even the second level of safety and security needs may apply in many organizational settings and enlightened organizations recognize that the employees desire for belonging and esteem can also be fostered in the workplace. Of course, the highest level need in Maslow’s hiearchary is growth focused and addresses realizing one’s full potential through self-actualization. This is powerful for both the employee and the employer because it not only takes the individual far beyond the basic knowledge, skills, and abilities of their role, but according to Gallup, it supports a much deeper level of job satisfaction, engagement, and productivity. It feeds internal reward and an evolutionary kind of personal development. Some might ask, is supporting self-actualization really the role management in the workplace? Historically, it rarely has been, but as with a focus on human capital in general, supporting an employee’s full potential as a human being is a means of creating insurmountable competitive advantage for the organization. And the good news is that most of the heavy lifting comes from the employee. Leadership just provides the right environment and resources.
A Silver Bullet – Yes, There is One
Interestingly, supporting employees is actually a lot less complex than it seems, and, in fact, there is a single thing you can do that will drive greater results than any other activity. A recent meta-analysis by Gallup of data from 100 million employees worldwide determined that the single most powerful tool for increasing employee engagement is regular coaching, which can also be the primary vehicle for strategizing self-actualization opportunities. In fact, all the other stuff managers do is fine and often helpful, but coaching by itself accounts for up to 40% of the difference between engaged and disengaged employees. Most of the administrative stuff is of little consequence to engagement and performance.
One significant challenge that many leaders face related to “people strategy as business strategy” is that it is contrary both to what they were taught and what their organizational cultures actually value. Managers are rarely, if ever, rewarded for developing people or building teams or even achieving high levels of EDI. They are typically rewarded for short term KPIs, growth, and profitability. The irony, of course, is that a sound people strategy will support all of those objectives, plus sustainability and human capital as a core competency and competitive advantage. It just takes perseverance and a genuine belief that it is the right thing to do.
Lastly, as noted earlier in the article, we are not advocating an either or approach, but the evidence is overwhelming that whatever else you focus on (finance, planning, technology, P&L, product strategy, etc.), you will achieve much greater results if you lead with a strong people strategy and build out human capital as your greatest organizational asset. As Patrick Lencioni so astutely observes, you can’t fake it, buy it, or replicate it. You can only build it, but once you do, it is powerful.
About the Authors
Anda is an ICF PCC credentialed Executive Coach with 1,800 hours of coaching, who has been coaching for over a decade. She is a Certified Professional Coach (PCC) with the International Coaching Federation (ICF) and has been coaching and creating workshops for teams for over a decade. Her goal is to give her clients value by being effective and efficient– pinpointing root causes and providing solutions in a short amount of time. Her ideas on LinkedIn made her recognized as one of the top 100 Influential Filipino Women on LinkedIn.
As a recovering C-suite executive and educator, Wallace has come to understand that high performance and respect for humankind are not mutually exclusive. His primary motivation is for people who associate with him to be better off because of that association and that the world be a better place as a result of his efforts.