Developing human potential: concepts and applications

¶ … Human Potential

"Nothing endures but change."

Heraclitus

Developing Human Development

The "learning organization" is without a template. Writers have tried to give it an ideal form or a template in "which real organizations could attempt to emulate." (Easterby-Smith & Araujo 1999). The learning organization, however, can be best characterized by saying that it's an organization where both individual and collective learning are crucial. Donald Schon has come up with a theoretical framework associating the experience of living in a situation of an increasing change with the need for learning. He states:

The loss of the stable state means that our society and all of its institutions are in continuous processes of transformation. We cannot expect new stable states that will endure for our own lifetimes. We must learn to understand, guide, influence and manage these transformations. We must make the capacity for undertaking them integral to ourselves and to our institutions. We must, in other words, become adept at learning. We must become able not only to transform our institutions, in response to changing situations and requirements; we must invent and develop institutions which are 'learning systems', that is to say, systems capable of bringing about their own continuing transformation. (Schon 1973).

As the world becomes more complex and global, challenges will arise in organizations that will need to be addressed in new and creative ways. When organizations face change, many different types of challenges will arise as a consequence and, as change is inevitable, every organization will face challenges at some point in their history. Finding meaning during times of change as well as building a common goal and perspective with other leaders and employees is critical to the success of an organization. Most organizations facing change will struggle against great odds and will need to find creative ways of dealing with the challenges. Working as a team is crucial as your organization finds new ways to thrive. (Barger 1995).

Leadership is critical, of course, because it doesn't just create an organization's culture, but it is the main force in dealing with culture evolution and change. An effective organization needs to contemplate their organization's culture and to what degree they want their culture to be based on the rate of technological change in today's day and age. (Schein 2009). Organizations should also spend time thinking about the management of the different subcultures that come out of the increased technological complexity. (Schein 2009). Today, leaders must also pay close attention to what a major global economic downturn can do to their organization not solely on a financial level, but also on a workforce level -- meaning that changes occur in employee attitudes during tough times as they become vulnerable or feel that their job is hanging by a thread. There are several steps that an organization and its leaders can take to make sure that employees are feeling motivated, rewarded and that they are living up to their fullest potential.

A lot has changed in the world of learning as well as for the leaders who lead organizations. Technology is rapidly changing the way we do business as well as the world in general, and, for that reason, technology issues need to be addressed as well as the way that technology will have an effect globally. New technology will "transform computing, medicine, manufacturing, transportation and our energy infrastructure." (Fien & Maclean 2009). Technology Review, the oldest technology magazine in the world and owned by the Massachusetts Institute of Technology, identified 10 promising technologies, when they are implemented, will change the world. The technologies are wireless sensor networks, injectable tissue engineering, nano solar cells, mechatronics, grid computing, molecular imaging, nanoimprint lithography, software assurance, glycomics and quantum cryptography. (Technology Review 2003). There are other technological advances such as digital cocooning, insperience and ubiquitous technology that will also lead to the transformation of our technological landscape. (2003).

In looking at Saztec International, a company that was featured in "Keeping Up with Information," we can see the process of globalization and technological advances in an extreme form. Because of information technology, the physical location of Saztec is quite insignificant, people and skills are tradable, and flexibility is total. But, at the same time, the competition is eager, since barriers to entry are minimal -- most of what it takes to be successful is salesmanship and a willingness to take a chance on delivering. (Kanter 2003). Saztec's commodity is data entry services, which is hard to distinguish by its nature; thus Saztec is strained to seek out lower cost and fastest response. In the meantime, it offers the poorest countries (defined by standard of living and wage), a way of taking part in the highest technology sector -- a strange result and itself a driver of change. Organizational flexibility increases worker vulnerability, which could incite political action to protect jobs, so not all change is considered positive, of course. (2003).

What all of these technological advances mean is that our workforce is evolving as well as the workplace. As workers head from standard to non-standard employment, from agricultural to services sectors and towards hypertext jobs, there needs to be a readjustment with existing resources and a reformulation strategy so that workers can grasp the opportunities that are offered by the emerging trends. If sufficient adjustments are not made, organizations will do one of two things will happen: the organization will crumble or it will continue to work inefficiently and eventually move towards obsolescence. (Fien & Maclean 2008).

Readjusting and reformulation is a challenge, however, since global differences in education as well as in the economy, unevenness in countries in terms of demography and technology, as well as disparities in gender, race and family economic status remain evident. (Fien & Maclean 2008). There is a discrepancy in the ability of human resources in different parts of the world to produce goods and services. There are some workers in developed countries very adept at using sophisticated technological devices, while their counterparts in developing countries can barely cope at all. (Elkeles & Phillips 2006). Developed countries, it must be noted, are also dealing with an alarming increase in an aging population while developing countries are experiencing "youth bulge." (2008). Fien and Maclean (2008) states that if something isn't done about this, the condition will widen an already significant gap in human resource, perpetuating, rather than stopping, the very serious cycle of poverty for developing countries. For countries with an increase in an aging population, their economic growth will slow drastically as well as their capital markets, investment and trade. Fien and Maclean (2008) state that by 2050, Japan, Russia, China and a lot of Europe will be affected most significantly by the impact of aging -- with more than 15% of their population expected to be over the age of 60.

The biggest challenge of the moment will be in producing people with quality human resources who can cope in the evolving society by redirecting resources to the global challenges. Labor market information systems need to fixate on providing for workforce mobility. (Fien & Maclean 2008). Human resource development requires quite a lot of attention because diversities in demography, imbalanced countries as well as inequality in gender, race and family economic status, is creating a huge global disparity. Human resource development must focus on enhancing productive capacities and optimize the resources for productive outputs. (Fien & Maclean 2008). Having a stable global population would make a huge difference when it comes to the achievement of sustainable development. But, contrarily, an increase in population growth makes the necessity for more food and social services like education, training and employment, health and recreation, and when those needs are not met, there is commonly a decline in the standard of living.

There are challenges with creating a more global learning organization (GLO), which are models that can help organizations create organizational culture that is globally inclusive in theory and practice -- at all different levels. This is based on a few different theories such as organizational development, learning organizations, human resource management as well as change theory to help the organization shift from an ethnocentric to a geocentric corporate perspective in every aspect of its organizational practices (from people to policies to technologies). Some of the challenges include the issues of dealing with the ambiguities of a process that is not completely specified. A truly global model has to have the ability to be applied across cultures. (Tolbert, McLean & Myers 2002).

Understanding the issues concerning human resource development is important for leaders because the evolving culture has consequences of the various ways in which growing organizations differentiate themselves and it's vital that leaders align the various subculture that have been created toward on common organization purpose. (Schein 2009). Managing the alignment of many subcultures has become particularly vital in the 21st century due to:

Mergers, acquisitions, and joint ventures in which the subcultures are actually entire organizational cultures that need to be blended or at least aligned; globalization, which produces many diverse multicultural organization units based on nationality, language and ethnicity; technological complexity, which produces many more "mature" occupational subcultures…;…information technology, which has created many more structural options of when, where and by whom work is to be done (Cultures tend to grow from the interaction of co-located employees, so…what kinds of subcultures can and will form in networks of employees who are electronically connected but may never have met each other). (Schein 2009).

Rapid technological change and globalization among markets and competition have led to organizations all around the world to form coalitions with other organizations as part of their strategy for change. Strategic partnerships enable organizations to increase their reach without having to add fixed capacity -- to gain a measure of stability in a bumpy environment by planning jointly with organizations on different points on the value chain, to reduce uncertainty or manage power dependencies. (Thompson 1967; Aldrich 1979; Kanter 2003). However, with these changes come issues concerning capital markets, currency rates, political shifts, tax policy, resource markets and technology; all of these issues shape organization fates.

The important thing to know about change when undergoing the smallest change to a merger with an organization across the world is that a leader has to know why they are going through this change and what powerful and convincing theories back up this change. Lacking new and creative theories and instead going with a familiar tactic may create more problems. Comprehensive understanding is therefore required. Kanter (2003) recalls a parable about change to illustrate the problems with understanding it. The parable was initially written by 19th century British writer Charles Lamb in an essay about how human's discovered cooking. Millions of years ago, Lamb suggests, people lived in quite large and extended families with domestic animals in simple houses built with wood and thatch. These homes were very simple and thus vulnerable to all of the elements of the environment. When everyone was away from the village one day, a house caught on fire. The good thing was that the only casualty was a pig in the neighborhood. When all the villagers returned, they saw smoke and ashes, but they smelled something delicious. Some of the villagers went digging around and they touched the carcass of the dead pig, which was still nice and hot. They burned their fingers, causing them to put them into their mouths to cool them. When they did this, they tasted something extraordinary. This is how Lamb suggests they discovered cooking. After that, when the villagers wanted to celebrate something, they picked out a house, put a pig inside it and then burned it down. Kanter suggests a moral to the story: "If you don't understand why the pig gets cooked, you are going to waste an awful lot of houses." (2003).

When dealing with change in an organization, understanding that language is full of ambiguity is another important detail to remember. (Kanter 2003). What one word means to one person often doesn't mean the exact same thing to another. Kanter (2003) suggests that this is especially common when people talk about "organizational change." Lewin had a model that was simple to use in understanding organizational change through three stages: unfreezing, changing, and refreezing. (Jones 1968; Kanter 2003). Kanter, while agreeing that this is a simple way of seeing organization change, hopes that it can give one an understanding of change, it shouldn't become so ingrained that one cannot see organizational change as something much richer after viewing it simplistically. Kanter, instead, believes that organizations are more fluid than frozen and they need to be thought of as having personalities of a sort. She also suggest that these "stages" in which Lewin spoke are not necessarily block type stages, they are more fluid, once again, in that they can and should overlap and interpenetrate each other in ways that are very important. (2003). They can be multidirectional and to change an organization deliberately, she suggests the image of grabbing some part of the "motion" and "steering" it into a particular direction that can be seen by leaders as a new method of operating or as a reason to reorient one's relationship and responsibility to the organization itself, while, at the same time, producing an environment and conditions that facilitate and assist that reorientation. (2003).

Like the Heraclitus quote at the top of this paper, "Nothing endures but change," it is important to think of change as a continuous flow. Organizations with its leaders and its employees are active entities with common elements that permit activities and people to be clumped together and then treated as an unit. While activities move, and new or different entities or people are included in activity groups, what is realized as the organization as a whole will also shift. That being said, it is important to understand that organizations are always moving and flowing. Kanter (2003) suggests that while there is some central thrust or directional push that comes from a mixture of the trajectory of past events, pushes arising from the environment, and pulls arising from the strategies embraced by the organization's character. All of the individual clusters are also moving and flowing and, at any given time, their direction may get off sync with the overall momentum or direction of everyone else. (2003).

After contemplating the effects of globalization and technological advances in this day and age, it is also necessary to consider the economic environment in which we are currently living as well. There have been dramatic changes in organizations in the last year because of financial issues. This is a scary time of change for senior leaders in an organization. There are many questions that an organization must contemplate when faced with higher expenses and a global turndown: Cutting prices to maintain market shares? How much should they be cut if they are? Are layoffs going to be necessary? How can our organization emerge relatively unscathed?

One of Donald Schon's greatest achievements was his innovation to delve into the extent to which companies (as well as social movements and governments) were learning systems and how those systems could be made better. Schon argues that the organization is the best example of a learning system and he noted that many organizations lose their stable base in the technologies of certain products and system that are constructed around them. This is especially interesting to look at today since there are great challenges in the nature of production and services. Today, organizations have to function in a globalized world and this has changed the way operations run.

Productivity and competitiveness are, by and large, a function of knowledge generation and information processing: firms and territories are organized in networks of production, management and distribution; the core economic activities are global -- that is they have the capacity to work as a unit in real time, or chosen time, on a planetary scale. (Castells 2001).

When looked at from this perspective, the lack of attending to the learning of people and groups inside organizations can cause major problems. Companies need to think about adding not just devices -- technological or machinery -- but they need to think about how they can make their production more efficient as a whole. This is an issue today. Organizations face the challenge of knowing how to generate knowledge, where to spend their money, and what products need to be developed and where.

Part II. Developing Human Development

Developing employees' potential is something that organizations need to embrace. According to David Gershon of the Empowerment Institute in New York, Gallup Research has shown that organizations use less than 20% of their employees' potential. In order for potential development to occur, organizations must inspire their employees to grow and push their potential. In a culture as such, innovations which require new behaviors to be adopted can take root. Employees decide to give more than 100% expending their discretionary energy for the sake of the organization. Employees will want to give more of themselves and invest themselves in their organization rather than be available to the highest bidder. For many organizations, developing their employees' potential is one of the most strategic moves that can give organizations a competitive advantage in the marketplace. A Gershon state that using the analogy of a garden is a good way to understand whether or not an organization supports learning and growing. Will new seeds take root because the soil is fertile or will they die due to unfertile soil? Gershon believes that where organizations fail is that they simply assume that an organization's learning and growing capacity is built-in, and all that they need to do is "train" the employees and they will soon exhibit the new behaviors.

An empowering organization assessment helps an organization to understand the current ability of its employee's to adopt new behaviors. Symptoms of disempowering organizational culture often include fear of making decisions; lack of participation when it comes to making decision; not taking new innovative ideas seriously; a discrepancy in leader and employee mindset; distrust; cynicism; apathy; not initiating growth activities; employees feeling underappreciated; lack of employee recognition for their hard efforts; and, blaming and victim mentalities. (Gershon).

In order to change an organizational culture so that positive change in other areas can take place, developing the full potential of its employees has to happen. Giving employees responsibility so that they are actively participating in the organization is one way to change organizational culture in a positive way. This, as we can see, is the contrary to being a helpless victim in the organization.

Communication is another crucial element for change. This communication should always be honest, open, transparent -- as well as vulnerable, according to Gershon. The real issues have to be dealt with in order for true communication and, thus, change to occur. Trust is a big element on the same note as communication -- that is to say, individuals need to feel safe enough to be able to speak their minds. Employees who feel like they may be punished for saying what is on their mind is not advantageous or productive for the organization as a whole. Interpersonal relationships that are worthy will thus be a result of this new way of communication style. This also allows for any problems to be deal with in an efficient manner.

Within the framework of the organization, individuals need to be encouraged as well as rewarded for the work on real growth issues necessary for profession (and personal) development. Individuals should have the desire to constantly challenge themselves so that they can grow. Employees who are doing this type of growth also need to be rewarded and encouraged, which will only further inspire them to keep on growing.

Once an assessment of the organization has been successfully achieved, there should be a baseline to start from in order to intervene so that learning, growing and full employee potential development can begin. Creating an organizational culture that is "fertile" was the first step. Now, it is time to determine what needs to be "planted" -- that is, what "seeds" -- or behaviors do the leaders want the organization to adopt as a whole? Building the organizational capacity to cultivate those behaviors will take time and thus it needs to be approached as a process. Determining the behaviors that the organization wants/needs is the first step; secondly, a culture can be designed and an accountability system implemented. Third, the capacity to implement the behavior changes should be built whether internally or externally. Finally, a program diffusion strategy should be designed and implemented. Once done, evaluation and adjustments can be made. (Gershon 2010).

In determining what to do in the case of a recession, past recessions have taught leaders a few different methods of coping. For example: There should be a narrowing of the focus in order to give the best value for key customers by making sure that resources and capabilities are efficiently deployed. Another example: Bring people together to rise up against the internal competitiveness and defensiveness that frequently goes along with organizations that have to tighten the purse strings. Another idea: Manage the temperature in order to establish a climate where employees feel comfortable addressing certain issues that maybe were not exposed before. (Slack 2009).

Narrowing the Focus: Enjoying the moment when things are okay and then becoming desperate when they aren't so okay can be dangerous because it leads to the loss of focus within an organization. However, leaders can learn to be more disciplined in how they view things (rather than just seeing things as good or bad / black or white). Slack (2010) asserts that studies that have been conducted during past recessions has shown that organizations that work efficiently to decrease spending and reduce other types of costs are significantly less impacted by the recession environment. Positive ways to manage one's organization during a downturn is to narrow the organizations portfolios, staying fixed on places where clear leads can be found. Turning away from bad negotiations is another good way to deal with change that the recession can bring. People who pursue unprofitable sales in order to hold market share will lose out. Slack (2010) states that leaders in profitable growth organizations suggest narrowing in on "critical few priorities.

Setting Priorities Based on the Needs of the Customers: During a recession, there is often no other choice but to cut costs -- and sometime significantly. This is important, unfortunately, Circuit City is a good example of not knowing what to cut. For example, in 2007, Circuit City cut 3,400 of its top-paid sales associates just before undergoing efforts to improve its customer experience and revitalize sales. But without the knowledge and the experience of these very crucial employees, the transformation ended very badly. Circuit City declared itself bankrupt in 2009. However, Best Buy, one of Circuit City's major competitors, took on more specially trained staff around the same time and they were able to increase their profits by 52%. (Slack 2010). What this shows us is that while sometimes there isn't any other option than to cut jobs, not investing during a downturn or waiting until the downturn finishes isn't the most successful option for organizations. On the contrary, Slack (2010) suggests that during a recession is precisely a good time to go "bargain shopping" (2010). It's like anything else, when there is downward pressure on costs, organizations can pick up investments for a lot cheaper. This is also a good time to think about getting some creative and innovative people into your organization as there are many individuals who are recently out of work -- a lot of them very talented. This is because some organizations become way too aggressive in an effort to stay afloat. This kind of thinking is incorrect and, as in Circuit City's case, can be devastating.

Slack (2010) that while you can invest during a recession, you have to be careful as to what you invest in. He notes a study that examined investments of several businesses that endured recessions from the 1970s to the 1990s and discovered that businesses that invested in R & D, marketing, and customer-perceived quality did very well, while other businesses that invested in working capital, manufacturing, and administration did not.

As depicted in Circuit City's case, planning the management of your employees is imperative. A big worry among employers has been that the best and most talented employees in important or highly influential roles were kept and in now way susceptible to being recruited by a competitor. Identifying the employees that are ones with the highest potential and talent and leveraging employee engagement efforts is a good idea. Organizations can develop employees with high potential by providing certain development experiences. This, according to Slack (2010), has been shown to increase the retention of major players by more than 15%.

While learning how to identify and retain employees is critical, knowing when to lay off or not lay off is one of the most difficult questions any leader can make during a recession. The only way to answer this question is by balancing both positive and negative elements of downsizing the organization. There are some benefits of downsizing such as a short-term spike in the bottom line because it reduces the compensation paid out, increases efficiency in operations, and realigns resources that can improve products and services. (Slack 2010). Rather than laying off employees, some organizations prefer to find other strategies such as slashing management bonuses, freezing salaries, and decreasing compensation options. (Slack 2010).

Company morale can be a result of a recession. Budgets are tighter and, because of this, employees become defensive, territorial and oftentimes very competitive, according to Slack. (2010). This type of negativity can penetrate all different levels of an organization, which can affect energy and focus. Out of fear, employees beginning seeing others inside the organization as threats and therefore they may fail to deal with external threats that are coming from the competitor or their customers. When employees keep their heads down to keep their bosses happy it doesn't help anyone and it also doesn't offer the chance to learn about the organization or its customers.

The topic of communication once again arises because when people are feeling threatened and vulnerable, they must feel like they can ask questions or suggest ways to improve situations. Leaders who are really open to will want to learn from their employees. A leader, who is undoubtedly struggling with questions during such a difficult time, should be able to admit that he or she doesn't have all of the answers. Thus, the leaders must make the organizational culture one where people feel comfortable asking questions or giving their input. Slack (2010) gives the example of one of the earliest records of leadership, Xenophon, a Greek military leader in 400 B.C.E. And how he described the importance of making himself available and open to even the men in the bottom ranks:

With the Athenian army in danger of imminent attack -- and its back to a raging river -- two of Xenophon's foot soldiers managed to locate a river crossing that would allow the army to escape. They went directly to Xenophon with their reconnaissance. Because of the trust between the leader and his followers, Xenophon took immediate action, and the army succeeded in escaping. (Slack 2010).

During bad economic times or any other difficult time, the best leaders are expected to make very hard choices that are needed in order to protect the organization. Leaders oftentimes may feel compelled to simply handle the problems themselves and start making change on their own and while, Slack confirms (2010) that this does make others more comfortable temporarily by "lowering the heat," so to speak, it is most often quite a big mistake and the results of this are usually negative. Without others to give their input, the perception of the problem can very narrow and thus making a strategic decision while embracing the full scenario is nearly impossible. The support of others must be given during times of change. Coalitions that can move together to provoke change are the best route to go (2010) and they will improve the performance of the strategy as well.