Management's Role In Bringing About Best Practice Approaches To People Development
Humans are our greatest asset, but a constant challenge is to recognize that fact within an organization and to bring about best practices methods of achieving the greatest contribution from the human assets.
This paper will examine the methods by which the most can be taken from human assets and the ways in which people development can peak.
Management style and thought is, contrary to popular belief, one of man's oldest areas of study. One of the earliest recorded examples is Confucius himself who in 500 B.C. attempted to persuade the feudal kingdoms of ancient China that a successful and powerful leader had to be humane, benevolent and just. Needless to say, it took his ideas a significant amount of time to catch on.
But Confucius was in this respect, as in most respects, phenomenally ahead of his time. He realized that a leader could lead with an iron fist and guide with fear and cruelty, but such a reign would be limited in its duration, its reach, its influence and its historical value and precedent.
Confucius was after the "great man" concept of leadership. And today, his vision has been applied and reduced to any number of management style theories that seek to employ best practices to squeeze every last ounce of the power of "people" out of an organization. Management strategizing has gone from praising and prizing technology and capital investment in the late 1980s and early 1990s to concentrating on acquiring and cultivating - and most importantly, keeping - quality human capital.
Companies and organizations in general are beginning to realize the power of human capital far transcends any technological or infrastructure improvements on a similar scale. That is why government organization, for-profit corporations, not-for-profit groups, small businesses and even universities are employing management consultants to help them help their own human capital recognize their potential in the workplace.
The first recognized technique of getting the most out of every individual in the workplace is through hiring. Probably the most cutting edge thinking and analysis in current academic and management circles on hiring is contributed by Jim Collins in his book, "Good to Great." Collins notes that the first step to building a successful enterprise is actually people development:
The executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it. They said, in essence, "Look, I don't really know where we should take the bus. But I know this much: If we get the right people on the bus, the right people in the right seats, and the wrong people off the bus, then we'll figure out how to take it someplace great."
And singly, this is one of the most powerful statements regarding people development. People truly are an organization's greatest asset as, if they join because of where this hypothetical bus is going, "what happens if you get ten miles down the road and you need to change direction? You've got a problem. But if people are on the bus because of who else is on the bus, then it's much easier to change direction: 'Hey, I got on this bus because of who else is on it; if we need to change direction to be more successful, fine with me."
The idea behind getting the right people on the bus and wrong people off the bus is an acknowledgement that even the organization's goals and missions are subservient to the quality of its people. It also recognizes a very important concept in people development: People are motivated often by other people and not by their goals. Confucius' comments also would link directly to Collins' assertions: The leader of the group, the bus driver if you will, must present a management strategy that is attractive to the riders - a management strategy that will attract the right people to the bus and get rid of the wrong people.
People are an organization's greatest asset when they are self-motivated: "The right people don't need to be tightly managed or fired up; they will be self-motivated by the inner drive to produce the best results and to be part of creating something great... If you have the wrong people, it doesn't matter whether you discover the right direction; you still won't have a great company. Great vision without great people is irrelevant."
Wells Fargo and Bank of America took vastly different approaches to hiring. According to Collins' case study, Wells Fargo performed amazingly well for a string of fifteen years beginning in 1983. However, according to Collins, the reason for this string of success stemmed from the company's hiring strategies dating back to the 1970s. Chief Executive Officer, Dick Cooley, assembled an amazingly talented management team in the early 1970s (the most talented team, according to investor Warren Buffet) and allowed them great leeway and incentive to lead Wells Fargo passionately and successfully.
Cooley knew the banking industry would change, but he had no idea how exactly it would change. So, instead of developing a concrete strategy to deal with the impending change, Cooley simply began to hire a talented pool of leaders for his company. In fact, he began to hire leaders without even a specific job description or title in mind.
Wells Fargo basically began hiring talented leaders left and right, "injecting an endless stream of talent" directly into the veins of the company. Cooley's theory was simple: "That's how you build the future... If I'm not smart enough to see the changes that are coming, they will. And they'll be flexible enough to deal with them."
Again, a plain ringing endorsement for people development. Here, a major corporation hired individuals at what must have been relatively high salaries to tackle a job that the company could not even define. These leaders were allowed to develop and, when change arose, they were responsible to take that change by the horns and serve the company to the best of their talents.
And the strategy worked out. Deregulation hit banking and changed the entire business, and during a period when Wells Fargo's peers fell 59% behind the general stock market, Wells Fargo outperformed the market by over three times.: "Wells Fargo's approach was simple: You get the best people, you build them into the best managers in the industry, and you accept the fact that some of them will be recruited to become CEOs of other companies."
Wells Fargo took people development to the next level in its approach. Surely, the company realized that people were its greatest asset. Interestingly, it did not base its success formula on retention, either. Wells Fargo realized that its executives would leave at some point. But, rather than allow that to deter them from hiring the best, they hired the best anyway, knowing that they would only have their services for a limited but important period of transition.
Bank of America, on the other hand, took a very different approach, according to Collins:
While Dick Cooley systematically recruited the best people he could get his hands on, Bank of America, according to the book, Breaking the Bank, followed something called the "weak generals, strong lieutenants" model. If you pick strong generals for key positions, their competitors will leave. But if you pick weak generals - placeholders, rather than highly capable executives - then the strong lieutenants are more likely to stick around. The weak generals model produced a climate very different at Bank of America than the one at Wells Fargo. Whereas the Wells Fargo crew acted as a strong team of equal partners, ferociously debating eyeball-to-eyeball in search of the best answers, the Bank of America weak generals would wait for directions from above. Sam Armacost, who inherited the weak generals model, described the management climate: "I came away quite distressed from my first couple of management meetings. Not only could I get conflict, I couldn't even get comment. They were all waiting to see which way the wind blew."
Sure enough, by not investing enough in people development, and not realizing that strong people could be its greatest asset, Bank of America lost $1 billion during the middle 1980s.
Bank of America finally understood the folly of its ways and began to recruit top executives from - you guessed it - Wells Fargo. But it was too little too late: Wells Fargo continued to excel but Bank of America struggled to get out of its hole.
This case study illustrates that the power of people development. And hiring is the single most important step in recognizing people as an organization's greatest asset. And this does not mean a genius with a thousand helpers: Confucius, for instance, did not believe even in the idea of a…