One of the Biggest Mistakes Companies Make

Working for a large corporation I am accustomed to the same regular routine. If the previous year (or quarter or month) was a good one, then there is a brief period of celebration and recognition and then it’s on this year and how we need to “keep up the momentum” or make “this year the best year ever.” On the other hand, if last year was a bust then management finds a way to highlight a few bright spots but then focuses everyone on the new year/quarter/month, to forget about past failures.

Along with these transitions comes the announcement of the coming year/quarter’s goals and priorities. While the specifics vary for each industry or division, for any company they appear to be essentially the same. Let me break it down:

  1. Increase Revenue
  2. Lower Cost
  3. Improve Customer Satisfaction
  4. Develop our People

The order of the first three may vary but they are pretty straightforward. Every business is looking to increase top-line revenue and increase profits by cutting costs in the process. Customers fuel profits, so they are important and new measurements like Net Promoter Score help companies focus on creating customers that are “willing to recommend” new customers.

Then there’s number 4: “Develop our People”- i.e. improve the skills of company employees. This is always on the list, but interestingly enough it is always last; almost like an afterthought, I would presume. I call it an afterthought because despite good intentions it is the first thing that goes to the waste-side when priority numbers 1-3 are not being met. Plus it is very hard to measure.

I feel like developing employees is such an important thing for companies to focus on, but it consistently gets a disproportionally low amount of funding.

While there have been organizations that I have been a part of that truly do care and have gone to great lengths to develop me and other employees, this is not always the case. A couple years ago, I was at our division kick-off conference and our VP was presenting our priorities for the quarter to the managers. Guess what item was on the list, that’s right, “develop our people” Naturally, it was right where it always seems to be, at the very bottom of the priorities list.

That quarter I proceeded to watch as very little (if anything at all) was done to develop me or the people who worked for me. Our VP didn’t seem to care about his people. There was a hotshot cavalier attitude that permeated through the organization’s culture. It was all about results and no matter what we accomplished we were pushed to do more. I am all for stretch goals, but it is important to set your people up for success. While expectations of success was clear, we weren’t given training and resources that matched our goals.

When the next quarter came around, I remember laughing to myself as I saw the new priorities. “Developing our People” was on the list again, at the bottom, but this time I knew nothing was going to happen.

The question beckons, why even include it on the list at all? Is it because corporate leaders feel like they have to in order to appear to care about their people? Is it a habit? Do they do it in order to retain existing employees? When things play out like they did for me, it comes off as insulting to even include people on the list.

In light of this typical business practice, I have two recommendations to corporate leaders:

  1. Move “developing our people” up the priorities list– Developing employees as leaders empowers us and actually increases the other three typical priorities (revenue, cost reduction and customer satisfaction). This should be higher on the priorities list. Truly making this a priority also improves corporate culture as employees will want to come to work more and will be invested in their work if they know that management cares.
  2. Actually mean it– Corporate leaders shouldn’t just put developing employees on the priorities list, but should make a real effort to foster regular employee development. Create more mentoring and training programs. Better recognize accomplishments to encourage appropriate behavior and actively engage employees directly to see the best areas to focus on. It’s better to leave this priority off the list than to keep it at the bottom and do nothing to support it.

Corporate leaders need to remember that their people are the most important part of the equation that drives profits and happy customers. Developing employees shouldn’t be an after thought; it should be moved to the top of the priorities list.

What do YOU think?

BE AWESOME!

-MR. BIZ

 

 

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About Young Professional's Edge (YP Edge)

Aaron McDaniel is a corporate manager, entrepreneur, author, public speaker and community leader. Aaron has held numerous management roles at a Fortune 500 company, being appointed Regional Vice President at the age of 27, and is the founder of multiple entrepreneurial ventures. He is also the author of the book, The Young Professional's Guide to the Working World (http://www.amazon.com/Young-Professionals-Guide-Working-World/dp/1601632428). Aaron instructed a highly rated student-led course on leadership at UC Berkeley’s Haas Undergraduate School of Business and has a book, The Young Professional's Guide to the Working World: Savvy Strategies to Get In, Get Ahead, and Rise to the Top, due to be out later this year. Aaron offers advice that helps young professionals build the foundation for a successful career. Visit his blog, http://www.ypedge.com to learn more.

Posted on November 23, 2012, in Commentary, Philosophy and tagged , , , . Bookmark the permalink. Leave a comment.

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