It happens regularly all over the world and in every company. The CEO addresses his collaborators: “You are the most important resource at this company”.
He believes it, and he is right.
His collaborators listen politely but are skeptical. They are not wrong. They know that during the slightest economic downturn the “most important resource of the company” will immediately pay the price for it.
Stéphane Garelli, Professor Emeritus at IMD and founder of the World Competitiveness Centre.
If people are our most important asset, why are their skills and knowledge so poorly measured and reported by organisations?
According to Peter Cheese is chief executive of the Chartered Institute of Personnel and Development (CIPD), productivity in the UK is still below its pre-recession level and low in comparison to international benchmarks. Youth unemployment remains worryingly high, and a recent OECD Skills Survey has brought the importance of improving the country’s skills base into sharp focus.
At the same time, concerns about corporate cultures and leadership behaviours, improving employee engagement and productivity, and taking advantage of diversity to build more sustainable and innovative businesses are all recognised as critical challenges that affect the success of the organisations and societies in which we work and live.
We cannot overcome these challenges without more insight into how organisations are managing and developing their people, and building the cultures and operating models that ensure they are getting the best out of their human capital.
HR should capture relevant data to share with stakeholders, as to provide the right focus and support for the performance improvement interventions that make the difference, be this in staff development and training, performance management, reward or other HR processes and practices.
However, , despite efforts in the past, such as the Accounting for People initiative, there is little consistency of measurement and reporting practice around our people and organisations, and no agreed frameworks to help organisations or stakeholders when they ask the questions.
This is not just an HR agenda, it is increasingly an agenda shared by the finance and management professions, by business leaders, external stakeholders, and even regulators and governments as more focus is brought to bear on how organisations are developing their workforces, their leadership, and their culture and values.
It is about how leading organisations are understanding, analysing and reporting on their people and organisational metrics and what value and insights this brings to better decision making and focus in building successful and sustainable organisations.
This video from the RSA asks why current systems fail to capture the value that people’s knowledge and skills bring to organisations and the economy.
Bill Gates pointed out:
“What would Microsoft be worth if it was sold without its collaborators;
one dollar?”
Nevertheless, accounting standards prevail. When a company downsizes its workforce, the market considers that it reduces its costs and therefore the share price goes up. It is absurd because in fact the company loses management competencies and personal skills, and should be less valuable.
The monetary aspect is not the only one to consider.
There is a value which stems from a shared culture between the company and the collaborators: attitudes, written or unwritten rules and a sense of mutual respect.
To have value, we must feel valued.
It implies a sense of intellectual affinity and even emotional closeness which must permeate every level of the company.
As Franklin D. Roosevelt once said: “A good leader cannot go too far from followers”.
