If only more companies would treat their human resources more like humans and less like resources.
The H in HR
I feel as though I’m losing the fight. I’m beginning to realise what it must be like for a boxer to fight out of his division – squaring up to someone much bigger and heavier. It’s no contest really, but but he keeps stepping in to the ring, only to be flattened. He can’t win, but won’t give up. The other day, that was me; not in the boxing ring but in the boardroom.
Here am I talking about what needs to be done to grow a business and the corporate guys keep asking me for the financial and compensation model that I use. Effectively, they are saying, ‘What financial model do you use to bribe our employees to do better?’ I count to 100 and everyone is wondering why I don’t reply; the silence is deafening and everyone is looking at me to announce the magic formula for greater productivity and growth. I am still trying to come to grips with my anger and so I count to 100 again and everyone is starting to wonder whether I’m stupid or just haven’t heard the question.
Then I give the response I’ve trotted out perhaps thousands of times, hoping it will eventually be understood: “Businesses are primarily social entities because they are made up of people who are social beings. Social beings are not mechanistic and economic tools; they are human beings with hopes, aspirations and emotions. Because each person is unique, a business, made up of unique people is a unique entity and its competitive advantage is achieved by giving these people the opportunity to be themselves rather than mechanisms that are managed to achieve certain statistical objectives. People don’t want to stop being themselves when they walk in the door to work. They want to be respected for who they are and what they are capable of doing. Once we introduce a financial carrot for people to do what we, the management want, we throw the potential of these people out the door because they are then simply going to do what we tell them to do rather than to get them to do that of which they are capable.”
In each of the thousands of interviews I have conducted in the work place over the years and in survey after survey of employees, the persistent unvarying theme is that money is always low down on their list of concerns. Their primary concerns are almost invariably that if the management would listen to them and their ideas, the business would be a lot better. If management could deal with their frustrations, they would be a lot happier and their productivity would improve enormously. Companies that recognise this simple phenomenon exceed analysts’ expectations by miles.
It so happened I have just re read a great article in the Harvard Business Review, which was in fact an interview between two guys who run a company known as AES. They started by setting up a small energy plant in Texas in 1985 and by the time of the article, in February 1999, they were a multinational company operating in many different countries with a revenue of $2.6 billion.
One of the founders, Roger Sant, was asked why AES did not pay hourly rates. “What are you saying when you pay someone on an hourly wage? You’re saying: ‘We only care about the physical time you spend in a plant. We don’t trust you, so you have to punch a time clock’. That attitude is left over from the Industrial Revolution. He then goes on to say that when employing people you should be saying to them, ‘You should and can bring your brain power and soul – your whole person – to work. You’re a part of this organisation; you have the same worth as everyone else.”
The story of what these two guys did is remarkable. They looked upon the people with whom they worked as people with hearts, minds and emotions that they wanted to unlock and they treated them with the respect that every human person expects. They built a company worth billions and were able to share that success with their people at a financial but, from their point of view and more importantly at a human level. Their people were rewarded far more generously than their counterparts in the industry but that was the result of them being given the opportunity to be themselves and bring their uniqueness to the workplace.
When people go to work they want to make a contribution that is their calling as humans. They expect to be rewarded as a given but if all that happens in the work place is that people are paid so much money for so much work, then any growth that might be achieved will be short-lived.
So, I retired from the boardroom before they knocked me out. But my message is that if we treat people like adults and ask them not to be something different when they come to work but to bring their hearts and souls to the workplace then great things happen. I have been blessed with the opportunities to prove this. I am also aware of many wonderful stories where others have done the same thing. People will help you grow if you trust them.
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Mark Robilliard writes: Well said Louis. Being one of the rare breed of accountants that is interested in developing people I have had similar ‘discussions’ with board room inhabitants and also managers.
I’ve even wasted my time advising businesses to stop calling their people ‘assets’ or ‘people capital’. I know these names are very sexy to the HR types desperate to be listened to by the board and senior execs, but these very names bring limiting associations such as buy/sell, depreciate, repair, worn-out, used-up, replace, broken etc. In other words, they de-humanise the very essence of the organisation – the people within it.
I don’t have the solution other than providing a mirror to each so they can quickly find the problem.