Showing posts with label human capital. Show all posts
Showing posts with label human capital. Show all posts

Tuesday, February 23, 2016

Value People

I have talked about this before in my short diatribe against the term "human capital." But that has been a while, so after hearing John Maxwell speak last week, it is once again top of mind.

I try to read and listen as much as I can to anything about leadership. Last week The Sewell Family of Companies hosted a leadership event in Wichita Falls, featuring John C. Maxwell. I have read many of Maxwell's books, but have never heard him speak, so reserved a seat at this event. Although there were many excellent takeaways, there was one that I wanted to address today. Mr. Maxwell listed 5 things that he feels if a person does every day, will allow them to live a life of significance. Those 5 things?

  • Value people
  • Think of ways to add value to people
  • Look for ways to add value to people
  • Do things that add value to people
  • Encourage others to add value to people
I want to talk about the first one, "Value People." If we cannot do that, then it follows that the remaining four won't happen. If people are not valuable, why would we do any of the other steps?

We all say we value people. Our companies say we value our people. We say it because we are expected to. But do we? Really? Because our actions tell a different story.

When we value something, we consider it to be important or beneficial. We have a high opinion of that person or thing. We believe people are important to our company, at least in a philosophical sense, but do we believe they are beneficial or do we have a high opinion of them? If we do, we don't act like it. I cannot tell you how often owners (and even HR people) talk employees down.  We talk about them being lazy, disloyal, without work ethic, dishonest, etc. No doubt, some are. I would argue that most are not. Instead I think we get what we expect. People live up to our expectations. If we constantly tell people in words and actions they are not valuable to us, they will tend to give us exactly what we tell them we expect. A few will excel in spite of us.

Some of us are smart enough not to voice comments about how we feel about our employees, but our actions speak strongly--in fact, even if we are telling people how important they are and how much we value them, if our actions tell a different story, our employees will believe what we do, not what we say. If we don't "have time to train" people, that says we don't value them enough to increase their value. If our handbook reads like a police state, that tells employees we believe they are dishonest and lazy. If an employee comes to talk to us about a problem and we continue to read our email while they are trying to explain the issue, that says they and their problem are not important enough for you to listen. If an employee has a suggestion to make a process work better, but are told "If it ain't broke, don't fix it," that tells them their creative and problem solving skills are neither valued nor wanted. Employees are not going to continue to try to push the rope up hill.

If you want gold from people, treat them like they are gold. There will be a few that in spite of your efforts will not live up to your expectations. Fine. Help them move on to other opportunities. The rest will reward you for your efforts.

Thursday, December 15, 2011

The Faulty Thinking Behind "Human Capital"

I take a generally negative view of the term "human capital." The expression came into vogue as a way to emphasize and to attempt to capture the value of people. It seems that if something doesn't have a monetary value attached to it, then we cannot conceptualize its importance in business. I fully understand the value of people; after all, that is what this blog is all about, but I do have concerns about the term and its implications in how we think about people in our organizations.

The term "capital," according to Investorwords.com is defined as:
  • Cash or goods used to generate income either by investing in a business or a different income property
  • The net worth of a business; that is, the amount by which its assets exceed its liabilities
  • The money, property and other valuables which collectively represent the wealth of the individual or business
Following this definition, human capital would be one of the "other valuables."

There is not complete agreement on the definition of the term 'human capital." Sometimes the term "human capital" is used almost interchangeably with the word "people." It may also refer to the productive output of the person or to the set of skills a person has that increases the economic value of that person.

But the important point is that the "capital" if you choose to call it that is inseparable from the person. Therefore, you can invest to increase the value of the person, but since slavery is no longer legal, you can't own the person that controls that value. Even if you rent, borrow, lease or purchase the capital for a period of time, you have only so much control over the value of of the output you receive. The person can control the amount and quality of what they produce for the organization. They control how long you have access to their knowledge, skills and abilities. When the employee leaves, so does your investment.

For us as business people, the key is to find a way to get the employee to choose to put forth their full effort to invest their capital in our organization. That is the bottom line for business and what we'll discuss going forward.