Human Capital

As large organizations continue to delayer and eliminate middle management more and more responsibility is being transferred downwards across the organization. It never ceases to amaze me to observe the rigorous criteria organization’s enforce to ensure the ROI on capital expenditure. In comparison how much are most companies are willing to invest for training in their front-line management or key players who manage the most valuable capital of all, human capital? My experience has been not nearly enough…..

For most organizations their workforce is their best opportunity to deliver an extraordinary customer experience to provide that all important and often elusive competitive advantage. Think about it, I know of organizations where any capital request over $10,000 must be reviewed by a committee of C-Suite executives. This meeting alone must cost at least a couple of thousand dollars to the company. Executives typically review a pitch from senior managers on why the investment is worthwhile. This same company has developers that make an average of $80,000 in various locations across North America but cannot find the budget to regularly invest in management training. You could buy a very nice BMW or Mercedes for the kind of money their employees are paid! Are we focused on the return of the right assets?

This may offend some people but company’s deserve a similar return on their investment in terms of high performance from staff on premier salaries. The fact is we are now competing in a global environment. If company’s don’t get the results from employees making three or four times as much as a developer somewhere else it can make sense to outsource to cheaper locations. This is why front-line management serve such a vital role for both their employees and their employers. We need to help our employees be the best that they can be to remain competitive, enjoy their jobs and make a meaningful contribution to their organizations and fellow employees. And make no mistake, for the companies that can afford to pay a truly engaged, well-trained, experienced and talented developer working on a high performing team locally, they will typically receive higher quality software faster and more predictably.

I am fortunate that the company I work for has a generous tuition reimbursement policy. What a great opportunity for employees and managers at Sage. It is vital that everyone takes the initiative to upgrade their skills on a regular basis to remain relevant in today’s workforce. It never ceases to amaze me how many people still believe that the company owes them a job even after the great recession. The onus is on the employee and the employer to invest in each other for future success. Employers who don’t invest in their staff are unable to respond to new market opportunities as quickly as they like. Their core competency becomes a core rigidity. Employees with the latest skills have more employment security as they are more valuable to the market. What happens if no one invests. You have employees who can’t move because they won’t make the same money somewhere else but are not able to improve at the rate needed to keep the company competitive in the market. In the end, everyone loses.

That said, it’s undoubtedly tough at the top, the middle and the bottom of most organizations hierarchy’s these days. Many people’s span of control has broadened considerably due to reorganizations over the past few years. For the most part this is wonderful. Daniel Pink suggests that autonomy, mastery and purpose are three critical elements in maximizing satisfaction and productivity at work in his wonderful book “Drive“. (If you have ten minutes to spare I highly recommend you watch this excellent video explaining his ideas in more detail.)

Empowerment is wonderful. It is incredibly powerful but can be dangerous if not used wisely. Empowerment has changed the nature of the relationship between employees and managers fundamentally. When employees\people taste autonomy and are given the freedom to choose the best way to proceed this often can bring out the very best in them. With power comes responsibility though which is often overlooked. Many senior talented employees now find themselves in “unofficial” leadership roles as well. It seems to me that these new leaders are often intimidated by their new responsibility and don’t quite understand how to act sometimes. This may sound critical. That is not my intent. We need to invest in more leadership training for these new leaders as well. In many ways they are just as influential as the frontline managers. If managers are trying to change the culture or change direction in a project and the unofficial leaders are not on board managers lose the “war” when they are not in the room.  It is very tempting to try to manage this by “staying” in the room. This actually makes matters even worse…..

Challenging but exciting times. Are you continuing to upgrade your skills for the next set of challenges and opportunities? Are you ready to take advantage of them? Is your organization?


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