Judith Bardwick, Ph.D.
A few years ago, I was at a meeting of a board I’d been on for 11 years. The board was responsible for two financial companies, a regional bank and an auto finance company. The detailed discussions about quantitative outcomes, especially financial ones, had gone on for hours and my mind started wandering. We never talk about the people part of the equation, I thought, and that’s the part that really interests me.
In that second, I realized two things: one, upper management is only interested in results, and the language it uses is quantitative, and two, in most organization employees no longer count as stakeholders. Even though you’ll hear the decision makers say, repeatedly and in earnest tones, “People are our most important asset, the truth is that few senior executives are eager to hear about employee issues. They are also essentially uninterested in the part of the organization that’s identified with those issues, the Human Resources department. Basically, they are largely uninterested in their employees.
Until roughly 25 years ago, Human Resource departments justified their activities by citing increased employee morale, satisfaction, and happiness. Human Resources thus spoke to executives in its own language, which was not the one used by executives. As a direct result of the difference in priorities—or the gap in language—HR managers could not mount an effective case for their contributions and could not earn the respect of the people who controlled the organization’s decisions and resources.
Today, there is an enormous body of evidence that the “soft” variables’ that HR tends to deal with have hard outcomes—quantifiable, measurable outcomes—and it is time for senior management to pay attention.
Much of what we have long thought was true about organizational dynamics is not true. In August 2002, James Clifton, chairman and CEO of the Gallup organization, challenged many widespread assumptions about work and workers. Calling on the responses that Gallup has accumulated and analyzed from millions of people about what they truly believe and want, Clifton showed that much of what was taken for granted is in fact incorrect.
- The premise is that CEOs care about people because they often say, People are out most important asset. The fact is that CEOs don’t care about the people; they care about results.
- The premise is that Americans ground their identities in their family and community. The fact is that since the early 1990s most people identify themselves in terms of their jobs, their job titles, and the brand image of their employers.
- The premise is that employees in the United States are fully involved in their work. The fact is that only 25 percent have a strong commitment to their job.
- The premise is that employees are really motivated by compensation and benefits. The fact is that an employee’s manager is the key to that person being fully involved.
- The premise is that the majority of managers are effective. The fact is that far fewer than one in four is strong and caring and therefore effective.
- The premise is that our economy is stronger than ever because we have visionary CEOs. The fact is that most CEOs are cost cutters, and cost cutters are never great executives.
Clifton argues that what is really needed now are people who understand the critical importance of “intangibles” because it is the intangibles, not tangible assets like capital or physical facilities, that create value through initiative and innovation.
A major intangible is the spirit of an organization. It is dramatically clear that, in too many of our organizations, the spirit is broken. The defensive focus on cost cutting has created a malaise that permeates all areas of the organization and squashes any optimistic sense of profit building. Recovering from that malaise starts with a reinvigorated investment in the “people” aspects.