Your Competitive Advantage is Only As Good As Your People

July 10, 2013
# min read
Mike Sleppin

If I could offer one tip for the future, sunscreen would be it. The long term benefits of sunscreen have been proved, whereas my other advice is only as reliable as my experience will allow.

Business leaders today understand the implications for success in this economy. Speed, flexibility, innovation, and continuous improvement are at least given verbal recognition. Some deal with these matters well, some don't. What is not given the attention that is needed is what happens when employees are not motivated, not trained well, exhausted, or not empowered to think as if they were owners. The result is wasted profit, revenue, opportunities, and most other necessary advantages.

If your organization is to remain relevant it must remain competitive. You can't remain competitive if most employees don't feel that they are more than hands and feet. Think about the things you love to do. Then think about the things you hate to do. Which things get done well, and which things don't get done well or not at all? The answer is obvious. Why would one walk through the doors on a Monday morning and leave all the common sense and experiences outside in the parking lot? Yet, most of us have known organizations in which that regularly takes place.

The hardest mindset to change is the deeply held belief of senior managers that their focus should be on capital; its acquisition, allocation and effective use. Capital is certainly important, but it is not the resource at your firm that enhances or constrains growth. Today we read and hear that organizations are awash in capital. American business has more in the way of retained earnings than it has ever had. What the least effective organizations lack is the trust of most of their staff. Survey after survey reveals that most of the employees in any organization can't wait for the economy to improve so that they can move on.

If you agree that human capital is the key to organizational capability, would you agree that you as a senior manager are spending enough time and effort to increase the value of that human capital? Human capital resides in the heads and hearts of each individual working for you. It is embedded in the relationships of your work groups. If I asked, could you email me your written plan(s) to nurture individual expertise and initiative? If you could not, what is that costing?

What I am describing is the need for a philosophical mind-set shift. This shift requires an intense focus on the organization's purpose, processes, and people. The role of HR should shift to building human capital as your core source of competitive advantage.

My eldest grandson started his first job this month. Many in his generation do not share the same values I have. Whether I agree with those values or not does not matter. His generation is the future. My generation is the past. Just as you can't sell what you have if you don't understand what the market wants, you won't be able to sell your values if you don't understand them. At McKinsey & company, 15% to 20% of a partner's time is spent on intensive individual feedback and coaching. The company maintains that its intensive effort to build and grow people is why people at McKinsey stay much longer than employees at competitor firms.

It is the soft stuff that many people scoff at that will revolutionize the results you get in a very positive way. Do you want volunteers or conscripts? Do you want people who put everything they can into the organization's success or people who put in just enough not to get fired? It's up to you!

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