People - Life and Death Matters

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By:Mike Teng

Winning and high-performing companies share the belief that their core asset is the people who have the knowledge, skill and experience. Maximizing the value of those core assets is key to business success. It takes the form of the strategy to acquire, retain, measure, manage and leveraging on the strengths of their people. It is no longer true that people are the key assets of the company. It is the good people that are the key assets and give life and vitality to the organisation. Bad people are the liabilities that spell death and trouble.

Competitors can catch up on core competencies. Benchmarking and reengineering may put them on the cutting edge. But only dedicated individuals can continuously produce new, creative and exciting ideas that allow a company to reinvent itself, manage its selfrenewal process, and foster a true learning organisation. Yet, many companies still fail to use the right management and leadership strategies to motivate and retain their staff.

Creative talent, while arguably the most prized asset for any corporation, is probably also the most unrealized. Creative people are thought to be nonconformist, unpredictable, selfabsorbed and therefore difficult to manage. Because many organisations are filled with conformists who tend to like other conformists, the frustrations and limitations of such stifling organisations drive creative people out. Therein lies the organisation's loss. Attracting, developing and keeping maverick talents are a major challenge to any leader. It is essential to create an environment that offers a high degree of freedom and encourages original ideas.

Company CEOs preached about people being their most important assets. However, their managerial actions do not match the rhetoric. Many quote examples of CEOs downsizing and firing of the people the first instance the company is in financial difficulty. Operating budgets are slashed on training and development. Employees can clearly see that the actions of the management action do not support the words. These CEOs got it all wrong. They should be hard on performance but soft on people.

When Richard Branson nominates his people as Virgin's greatest asset, he points adroitly to something that gives a corporation a long-term, inimitable competitive edge: the creative talent of its individual employees. He believed that loyal employees in any company create loyal customers who in turn create happy shareholders. In 1993, Branson gave a speech to the British Institute of Directors. His audience no doubt expected to be amused. Instead, the speech began: "Let me share with you the philosophy behind our experiences at Virgin. The basic principles are 'People matter'."

When interviewed on Virgin's key success factors, Branson replied: "I am absolutely certain that it is a question of the kind of people you have, the way you motivate them. I am sure that is what can make any company successful. If you can motivate your people, you can get through bad times and you can enjoy the good times together. If you fail to motivate our people, your company is doomed not to perform well. I find that I spend a lot of time trying to concentrate on motivating. Part of Virgin's management philosophy is based on the fundamental belief that the individual is all-important in our company." Sam Walton, the founder of Walmart took five hours at the shareholders' meeting to individually thank his four thousand excellent performing staff. Subsequently, he would invite them all to his home. Proctor & Gamble treated its staff as family members. All these top and successful companies truly recognise their people's contributions to the success of their companies.

Boulton, Richard E S et al said: :"In 1978, on average, book value represented 95% of market value, while 10 years later it was 28%. Today, it is estimated that 80% of stock value is driven from assets that do not appear on the balance sheets, assets like people, brands, knowledge and relationships."

The issue relating to company is usually the 'what and how' but rather than the 'who'. This is the wrong emphasis. It is no use having all the correct strategies and resources when you do not have the right people to do the job. To compete successfully externally, you need to have people perform successfully internally.

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Article keywords: human resource management, turnaround management, change management, retention, shareholders

Article Source: http://www.articles2k.com

Dr Mike Teng (DBA, MBA, BEng) is the author of best-selling book, "Corporate Turnaround: Nursing a Sick Company back to Health." He is known as the "Turnaround CEO in Asia" by the media.
http://corporateturnaroundexpert.com
http://corporateturnaroundcentre.com