Treat your people like you treat your money. I’d apologize, but treating people like money as opposed to employees is a good thing. Eric Garton, a partner at Bain, breaks it down like this in his recent Harvard Business Review article:
“Financial capital is abundant but carefully managed; human capital is scarce but not carefully managed. Why? In part, it’s because we value and reward good management of financial capital. And we measure it. Great CEOs are held in high regard for their clever management and allocation of financial capital. But today’s great CEOs need to be equally great at managing human capital.”
How do we turn this around? Start thinking of managing human capital just as you would money. Here are some to start with:
Measure. Garton states, “You can’t measure what you can’t measure”. The more you measure of employee’s performance, time, projects and other aspects, the more you know how to better utilize your human capital. We guarantee you measure money in more ways than one, do the same with your employees.
Invest. Think of all the time, planning, reasoning and preparation that goes into investing money. Most likely there is not even a mere resemblance of comparison for investing in human capital. You have to be willing to take a risk, but also plan employees’ projects in terms of the time and money you are allocating through them.
Monitor. Just like monitoring where your money is going and what difference it’s making, you want to monitor what kind of impact your employees are having. The employees who make the biggest impact should be on “mission critical” projects. For less than stellar results; projects, teams and processes can be improved.
Recognize and reward. In the article Garton mentions that when it comes to difference-making talent, companies should, “work hard every day to re-recruit them by creating a working environment that is inspiring and results oriented”. Garton also thinks that employees should not only be rewarded for their personal successes, but for the talent that employees recruit, train and maintain.
Now what would it look like if we started taking a few specific practices out of the way organizations use money, and put them towards human capital?
Budgeting process. Yes, organizations do annual reviews but in many organizations this has become a total check-the-box exercise. Rather than agonizing over each budget line item or undergoing multiple iterations like they would for a budget, managers rush through the review process. This is often done just prior to year-end reports and offers an empty assessment of all the year’s accomplishments.
Forecasting. How much better would human capital be utilized if we had monthly meetings where we agonized over the hiring process? An all-hands management meeting to discuss which candidates will get hired and which areas these people will be deployed is an amazing thought.
Capital Allocation. Can you imagine a thoughtful process where leaders would look at talent across the enterprise and plan out where people would be re-deployed in the coming quarter for maximum growth?
Audit Committee. How much more emphasis would be place on talent if a sub-committee of the Board of Directors had a read out and dedicated time to talk about talent cultivation and engagement?
It looks like the biggest difference in how organizations manage financial capital and human capital is the amount of time and effort put into the process. Another difference that may affect this outcome? Think of all the tools that managing money comes with. I bet you wouldn’t find too many managers doing a sort of “guess and check” process when it comes to how they get a grasp on their money. So what about their people? Without a tool that allows for measuring, monitoring and planning, managers are left to their own devices.
A tool like Cloverleaf allows for managers to measure, invest and monitor their people in real ways. Give it a go with your team at https://www.cloverleaf.me/go/.