Monday, 6 April 2015

The Most Important (yet ignored) Asset

I learnt this lesson during my management course and it immediately struck a chord and has always stuck on. The course was called "Services Management" and our professor used a simulation game to explain a very simple point about the services industry. In the simulation game we began with a set budget and the players had to invest that amount in various components like Marketing, Sales, Research & Development, Operations, Human Resources, etc so that the overall business could flourish. The traditional mindset is to create a stellar product and market it well, this should settle you as the winner. However, in a services-oriented business the players who invested smartly in their Human resources (a.k.a People) would end up on the winning side since happy and empowered employees will provide the clinching customer experience. In other words, "people" are the most important asset for a service-oriented business and how you invest in recruiting, training, rewarding, and empowering your employees will have a direct impact on your bottom & top line.

I know that this may not be a eureka moment for most of the readers and they would have read/heard this before, some may even argue that we are already following this, haven't you seen our Mission/Vision statement we have mentioned "employee satisfaction" in bold and even our tax friendly benefits structure should tell you how much we value our employees. Some others may also point out that they have a dedicated human resources department and also provide free cola and snacks in the pantry. What else do you want!!?

While doing the above is important, in today's workplace they are merely hygiene factors. On a day-to-day basis your people interact with their peers, managers and customers, and it is this environment that generally lacks the "people" focus it needs. Therefore, it's imperative that we continue to avoid the following pitfalls and foster the kind of environment that might end up being your USP.

Before we begin this, the underlying assumption is that as an organization you have spent a considerable amount of time in hiring the "right" people i.e. people who possess the raw (or finished) ingredients suited for your business, and not just another "body" to fill the manpower targets.

Stop treating people like a resource - Technically, people are resources but are very different from the other resources that you would encounter in a traditional manufacturing scenario. They have ambitions, moods, personal issues, quirks etc. and all this needs to figure in our thinking especially when we take calls on planning their career paths and while staffing them on assignments. Moving people from one project to another cannot be played out like it does with machines on the shop floor of a manufacturing unit. Do that more often than once and you are playing with fire. Remember, if the person isn't happy or convinced about what he/she is getting into then it is more than likely that this will impact the manner in which they service the client. At ThoughtWorks, in order to ensure that we are addressing people's interests, we take inputs from people about the kind of software projects we should be targeting. This helps ensure that we atleast have a buy-in from (majority of) folks on the ground and moving across projects is not a big deal since each project has something unique to offer.

"Empowerment" is the word - Interacting with clients and across internal teams, employees need to feel empowered and trusted to bring out the best in them. Managers constantly feel the need to micro-manage people to fulfill the needs of the demanding customer, this creates further distrust and frustration in the team. If you have hired the right people then have the guts to trust and back them, and they will deliver whatever is within the realm of "possible" or maybe even beyond that. Yes, they might make the occasional mistake but the value of an employee that feels that he/she can take ownership will soon surpass any losses. The practice of constantly pushing people by offering superficial rewards might only work temporarily, in my experience the employees who feel trusted and empowered will get the job done and still be satisfied.

The World is "Flat" - Flat hierarchies are not a new concept but even though a lot of companies have been able to move towards a flatter hierarchical structure and realize the benefits, there still are tons out there that enforce the almost military-like command and control structure. The only people who can actually change this are the senior level managers, but I guess if you have worked hard for so many years to climb the corporate ladder you want to feel privileged and you want to have your own office and you want people to address you as 'sir' (atleast on your face). No sir, sorry to have to tell you this but get your priceless *** out of that closed door office and sit where the rest of your folks sit. This one move in itself will send a very strong message to your people and further enforce the feeling of trust and empowerment that is key. It will also help you sense the pulse of the people without having to do meaningless point based employee satisfaction surveys every year. Use a meeting room for all the "closed" door discussions that you want to have.

Why are people leaving?  - Don't fool yourself to think that people are leaving just because they want to start their own venture or because you just couldn't offer a higher salary package. Bad managers and short-sighted people practices are still a big reason for people quitting, whereas compensation is the last reason most people leave. Is that true for your firm too?

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