Bootstrap Leadership Blog

Does your company make the claim that “people are our most valuable asset”?  It’s pretty common these days for organizations to trot out that common phrase.  But how many really mean it, and does it make a difference if companies actually “walk the talk” on this mantra?

The 2010 Fortune “Most Admired Companies” list would seem to suggest that actually following through on this commitment pays big dividends.  The Hay Group (who helps Fortune create the list) found that industry leaders – those who emerged from the recession on top of their respective categories – differ from their peers in one important way: they actually believe this bit about employees being their most valuable asset.

The three most admired companies in each industry were less likely than others to have laid off workers in the last two years (only 10% did, vs. 23% for their peers).  They were also less likely to have frozen hiring or pay, and by a large margin (21 comparison points), they were more likely to have invested $ and effort in branding themselves as an employer of choice.  A spokesperson for the Hay Group said: “most admired companies display a greater long-term focus on employees than do their peers.”  

In other words, they “get” that employees are an asset, not an expense. For these companies, spending money on employees represents an investment.  After all, if you really believe in an asset, you’re more likely to continue investing, especially if you believe that the investment is earning more than the cost of the capital required.  If you see employees as an expense (like any other drag on the bottom line), then you’re likely to cut that expense as much as possible (especially in a recession).

So what did your company do during the recession?  How did they treat their “most valuable asset”?  If you work for a company that kept the focus on employee development, engagement and retention these last few years, then you work for a company that actually believes what it says about its talent.  And if your company didn’t live up to it’s proposed values?  Hmmm… maybe they need to think twice about claiming that people are the # 1 asset.  Because when they had a chance to prove it, they dropped the ball.  And that should tell you something about how serious they really are about their talent. 

Twenty years ago, most leaders might have answered that question with a single word – money.  They’d have been wrong… dozens of surveys have shown that compensation is no higher than 4th or 5th on the list of what motivates us at work.  Rather, things like recognition, challenging and interesting work, and a compelling corporate mission have been proven to be more important than pay in motivating workers.  Now a new study might be shining additional light on the motivation story.

Teresa Amabile, a professor at Harvard, has just completed a multiyear study tracking the day-to-day activities, emotions, and motivation levels of hundreds of knowledge workers in a wide variety of settings, and has found a new candidate for the top motivator – progress.   Apparently, making progress in one’s work – even small wins that move the ball forward – is more frequently associated with positive emotions and high motivation than any other workday event.  On days when workers felt they were making headway in their jobs, they were happy and motivated; on days when they felt they were spinning their wheels, their moods and motivation were at their lowest.  Amabile feels this is pretty good news for managers and leaders, given that we may largely control events that allow for (or inhibit) progress.  We can remove barriers or provide important resources that can help people move forward. 

I think this is pretty good advice (and altogether consistent with the behavior of successful leaders).  If we want to keep our team motivated and full of positive energy, we have to keep them moving toward meaningful goals that they can realistically achieve.  We have to set clear objectives, recognize small wins, roll up our sleeves to pitch in where appropriate, and create an environment of teamwork.  Turns out people get a big emotional lift from making progress in their work – which makes a lot of intuitive sense.  The lesson for leaders is that we have to do whatever we can to help them make that progress happen, each and every day.

So you’re a big-time leader in your company; congratulations, it feels good to be high up in the company, doesn’t it?  But do you know how the company really values your role?  Are you in a critical position, or are you merely occupying a “surplus” role? 

If you work in a sophisticated talent management company, chances are someone has classified each leadership role above a certain level into some kind of category.  A popular framework used by large companies involves identifying jobs as follows:

A Positions (Strategic)
B Positions (Support)
C Positions (Surplus)

“A” positions have a direct strategic impact on the business, and have high performance variability – that is, being really good at this job produces major upside for the company.  For example, your primary revenue leader roles are “A” positions.  “B” positions have an indirect impact on the business, and generally support strategic positions by serving to minimize risk or costs, producing valuable internal processes or services, etc.  Examples of “B” positions might be staff positions in Finance, IT, HR or Operations.  “C” positions may be necessary for the company to operate, but have little strategic or direct line support importance.  Examples here might include philanthropic or corporate archivist roles (rare, but some companies have them!). 

“A” level roles have a lot of autonomous decision making authority, and the consequences of mistakes (or in having the wrong player in this role) are great.  “B” level roles follow more specific processes, and also have a high cost associated with making mistakes (think IT or Finance roles).  “C” level roles have less discretion in their work, have little positive economic impact, and the consequences of error are less severe.

So, does your company have a classification scheme like this?  Should they?  Is there any reason for you to recommend such a framework, and what would your company do with it?  For starters, knowing where your critical roles are across the organization comes in pretty handy when you’re trying to determine where to move high potential talent.  Generally, companies want to ensure that they really have strong, experienced talent in their “A” roles – obviously, these are not used for short rotational assignments. Other reasons to know your critical roles have to do with recruiting, compensation, and succession planning.

So, where are you?  Are you occupying a critical role, a real “A” level leadership position?  If not, is that cause for alarm?  Not necessarily – especially if you’re in a key “B” level role.  However, if you’re in a “C” level position, you might want to start pumping up the role’s impact or start looking around for a position where you can have greater influence.  After all, you don’t want to be considered “surplus” in this business climate!