“Getting the right people on the bus” a la Jim Collins’ Good to Great by has become a popular phrase among businesses and nonprofits. And appropriately so, since people are central to running business. Peter Drucker had it right when he wrote back in 1974, “A business enterprise (or any other institution) has only one true resource: People. It succeeds by making human resources productive.” And thankfully businesses are beginning to see the light. We keep hearing language about the importance of the human factor, or human capital.
Getting the right people on the bus is important, but the more challenging task is actually getting them into the right seats and making them want to stay aboard by creating an organizational culture in which they can flourish. To date, very few business are able to do this with any consistency. And when they do, it seems more mystery and luck than an intentional process.
A look inside the typical business curriculum and the background of many business executives explain why. It isn’t clear that senior executives or managers understand people; at least not if you look carefully at the actual hiring practices, management styles, policies, and organizational cultures. Admittedly, people are a challenge. Building a human-centered organization is no easy task. But even with an emphasis upon talent management, four main problems persist:
- We have a tendency to think of people management as the “soft” side of business.
- We tend to view people as a technology, computer, or piece of software. (Wouldn’t it be so much simpler if they really were?)
- We use tools (personality, culture, etc., assessments) that are based upon 1950’s or 1970’s research. A simple example is the Myers Briggs Personality Inventory. Developed in the 1920’s with little scientific validity, it was never intended for a work environment. Yet how many businesses and business consultants still use or recommend it?
- It is not clear what expertise is really necessary when it comes to people. Finance, accounting, law, marketing, advertising are all specialized fields and have degrees as their foundation. But with people, what expertise, beyond human experience, is essential? Isn’t everyone is an expert?
Organizations need an updated, more sophisticated, informed approach to people management that has kept apace with the dramatic amount of data and research being released in various disciplines related to people. This, however, is rare in today’s marketplace.
Why don’t we have the same level of sophistication for our people that we have for finance and law? Why is an outmoded, substandard approach to people considered acceptable?
I would like to suggest that we demand more. I often hear that there is no value add for a well-designed human ecosystem. But this is both uninformed and naive. Most businesses will lose 30-50% productivity due to toxic work environments, overwork, stress, poor management, and badly functioning teams.
A powerful example of the impact of a lack of expertise with people is found in Kurt Eichenwald’s recent article in Vanity Fair, “Microsoft’s Lost Decade”. Eichenwald tells the tale of Microsoft, its missteps in strategy and product development, and the toxic organizational culture and loss of talent that followed. Like many organizations, its leadership couldn’t keep the forces of entropy at bay and foundered in mediocrity. Whether Tim Allen can do any better at Apple is in question.
Eichenwald places the blame for the Microsoft’s demise squarely on the way its leadership managed people. Like many large public corporations, they followed the lead of Jack Welch and GE, putting in place a hard-charging culture through the practice of routine culling of 10% of the workforce. The purpose of this approach is to keep the work force hungry, competitive and vibrant. The assumption is that this will motivate people to do their best work. This strategy assumes much about the human person that is simply wrong headed. Rather than creating a high-performance culture, over the long term such an approach has the opposite effect. The result is a toxic, individualistic, competitive culture that ends in mediocrity, loss of market share and bankruptcy of the creative innovation so necessary to succeed in today’s marketplace.
Missing in most of the analyses of Microsoft, GE, Dow, Apple and other business cultures is one fundamental dimension. Business today is antiquated in its understanding of what human beings need to perform at high levels for prolonged periods of time. Most simply do not understand how to think about building a sustainable, flourishing, human-centered organization. They lack professional expertise, relying on their own layperson’s perspective.
In the next series of blogs, we will plot a way forward for businesses that are interested in designing, building, and enjoying the benefits of a human-centered organization.
We invite you to join us and value your comments.
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