Monday, February 10, 2014

People are our most important asset

Mark Twain once wrote that there are lies, damn lies, and statistics.  I think to that list we can add mindless platitudes, like the one that headlines this post.  I've never worked in or for a business that didn't suggest that people were important to its success.  Many I've worked with or for have some variation of the statement that people are the most important asset they have.  And, to a great extent it's true.  As businesses migrate to become "knowledge" businesses, the assets of the business to a great extent exist between their employees' ears.  This means that many of the assets of the organization get up every day at 5pm and go home.  Machines, computers and buildings are replaceable and fungible; good people aren't.

But while the aspirations that people are important are true, the reality is quite different.  If we managed the assessment, allocation and assignment of people the way we did other assets that are important - manufacturing equipment for example - we'd understand who is good at what, who is "loaded" with which projects, who needs some downtime and so forth.  While businesses have created incredible ability to manage physical and financial assets, they've never done a good job of managing people assets.  And this becomes ever more apparent as businesses get "lean" and mean.

Even as businesses have become more adept, the Pareto rule still holds:  20% of the people do 80% of the work.  If people truly were our most valuable and useful asset, we'd find more people like the 20% who do most of the valuable work, and reduce the 80% who don't add much.  Further, we'd understand that by overloading the really productive and capable people, we make them less satisfied and more anxious and time constrained.  Rather than tapping into all of their capability, we are really tapping into their efficiency and production skills.  The people who we most desperately need on innovation work are tied down in productivity and efficiency concerns.  Gradually, their insights, creativity and risk taking are being diluted.

So, you are wondering, I agree that people are poorly managed and allocated but what's this got to do with innovation?  Glad you asked.

Innovation is vitally, critically dependent on good people who are passionate about innovation and fully engaged and committed.  Note the adjectives:  passionate, engaged, committed.  It can be difficult to find passionate, engaged and committed people for any activity, much less one that is unusual, fraught with risk and unlikely to be repeated.  Further, if all the really good people are absorbed in keeping the business running day to day, how can they be freed up to work on innovation?  Even if they are "freed up", will they be passionate and engaged?

If people were our best and most important assets, we'd go about this very differently.  We'd understand what each person's strengths were and assign them to roles that capitalize on those strengths while working to shore up weaknesses.  We'd balance mundane, efficiency work with challenging innovation work.  We'd understand "loading", balancing workloads across teams rather than on the shoulders of a few individuals.  We'd realize that assigning a person to a role at 10% of their time is the same as not assigning anyone at all.  We'd be honest that slicing a person into tiny increments of time and concentration doesn't work well.  We'd create enough strategic clarity to help people understand corporate goals.  We'd reward long-term investments and risk-taking over short-term solutions.  What signals do we send to our "most important assets" about innovation?

So, if people are our most important asset, and people are important for innovation success, but we are failing at managing, prioritizing and developing people, what's likely to happen?  The best people focus on efficiency and getting things done.  There's no time for innovation, no bandwidth and worst of all, the best people can't be bothered to work on innovation.  It's time for a people management revolution.  Let's treat people like the vital resource they are.  Let's manage them effectively, develop them more capably and assign them to the roles that accelerate their growth and the growth of the company.  Doing that will also have the wonderful side effect of creating a lot more capacity for innovation.  Once we realize that people are the most vital ingredient for innovation success, we'll rethink how we plan innovation projects, how we staff them and how we motivate people to participate.  But these factors matter only if innovation is to become a sustaining capability, rather than a one time event.

If your company states that innovation is important, and that people are its most vital assets, the logical conclusion is that the best people should be engaged on the most vital corporate activities.  This shouldn't be difficult to ascertain.  Does the executive team place its best people on innovation, which is supposed to be vital for growth and differentiation?  Does it prepare the people who participate on innovation activities?  Are they introduced to new methods and techniques?  Are they assessed to discover their strengths and interests?  Is their work rewarded, regardless of the outcome?

If you can't answer yes to most of the question in the previous paragraph, then the titular statement is a platitude, and innovation will be a struggle.
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posted by Jeffrey Phillips at 5:39 AM


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