We all know the fluffy clichťs: "people are our greatest asset" or "our Human Capital is our strategic advantage." You may even have uttered them yourself in moments of weakness when you didn't know quite what else to say. It's even possible (although it's between you and your conscience) that you might even mean them. If you want to prove it, though, you'll have to treat your people more like machines.
I'll pause for a moment while the cognitive dissonance sets in.
The more charitable among you are confused. The more cynical are wondering what kind of substance abuse program we have at my company. How can someone honestly suggest that we demonstrate our commitment to people by treating them like soulless, inarticulate machines?
Because most businesses are set up to treat machines better than people, that's why. The reason is pretty basic. In most organizations, machines are investments, people are costs.
Let's take a company that makes gizmos. You go out and buy a Gizmo Processor 3000 (The newest model GP 3000). You will invest in it, maintain it, budget for it and protect it.
Not only that, but accounting principles and the laws of most countries encourage you to do so.
Your GP3000 is going to cost you a lot of money, but that's okay, because by capitalizing the costs you can classify this as an investment, rather than a cost. You can amortize the costs, write off the payments, and include it as a company asset. Your accountant loves you.
Furthermore, the costs can be planned for at the beginning of your fiscal year and properly assigned. The budgeting process and General Accepted Accounting Practices make it easy to invest in machines.
Where do your "people costs" go? Against your bottom line. Even though for most companies now, Human Capital is by far the biggest expense, there is no legal mechanism to invest in them as assets.
Your GP 3000 is an expensive critter to maintain, so you'll probably get a service agreement (which is an acceptable cost), budget for parts and downtime, and know exactly how much you'll spend to prevent problems you know will happen.
How do organizations maintain people? We all know that training, reward and recognition, comfortable work environments and networking opportunities are all vital factors in recruiting and retaining. They are the "maintenance" components of a people-centric business.
Try telling your accountant you want to put "reward and recognition" as a top-line cost. The resulting tantrum is more fun to watch than chimps playing rugby.
The Budget Process
One huge challenge to treating your team as well as you do the GP 3000 is the way most companies budget. There are two major hurdles.
First, budgets are done once a year and set in stone. Second, line managers are then held responsible for every variance from that number
If our GP3000 springs an oil leak, or production is down it's pretty easy to get it fixed. Either you already have money budgeted for that possibility, or the line manager knows they have to suck it up and take a hit that month- the ramifications are too grave not to.
People problems are harder to get money for. First of all, the problems are often not as immediately visible. The odds of an employee suddenly stopping all production and spewing oil everywhere are remote - although I did see it once after we cut staff in Accounts Receivable but bought a golf club membership for the sales force.
Training, Benefits and Reward and Recognition are key components in keeping your people functioning at a high level, but where does the money come from in your company? Are you set up to identify and fund problems that occur in your "people processes" as easily as you are with your capital investments?
Even when you do decide to spend the money, you've got managers who are trained to protect their individual department budgets like rabid Dobermans.
"You want to pull some of MY budget and spend it on those lunkheads in IT? Not likelyÖ." Sound familiar?
You have a Quality Control department to monitor GP 3000 output and any variations are investigated and fixed right away. Not only that, but if you found someone mishandling the equipment, or using it in a way that could cause breakdown you'd be on them pretty quickly.
Seven out of 10 people who leave their jobs blame their managers. Who is keeping an eye out for your employees, making sure they are not being mishandled, mistreated otherwise serviced improperly?
Again, where's the budget support and investment to do that?
Until organizations realign their internal business practices to meet the realities of the modern service economy, there will continue to be a massive disconnect between their words and actions.
As for me, on my last job review I was asked what I wanted my next position in the company to be.
I said I want to be a GP 3000 when I grow up.