Twelve Principles for Managing Your No. 1 Asset

by Jimmy L. Smith, Jim Smith Quality

No matter the size of the business, people are an organization’s No. 1 asset. There are a few basic principles to keep in mind when managing this asset for success.

With so much focus on customers, we often lose sight of our most valued asset—our people—and the critical roles they play in the success of our organizations. Organizations are their employees, and customer service and quality are dependent on these skilled, motivated people.

Employees should be seen as assets, not expenses. Assets are something to invest in. One indisputable fact is that frontline workers, who interact daily with customers, know customers the best. They’re the most familiar with the processes in place and have ideas about how to improve them. Unfortunately, managers have been trained to think they are supposed to know all the answers. Surprise—they don’t!

Continuous improvement initiatives can bring about positive changes but often do not involve rank-and-file employees. These initiatives are sometimes blamed for downsizing. Often, they are viewed as “flavor of the month” programs, creating skeptics and cynics of the very people who are needed to embrace new and better ways to perform work and provide service to customers.

Many organizations have missed the point. Some act as if they can treat employees badly (especially when the sluggish economy prevents them from going elsewhere), and then expect these same employees to treat external customers with world-class service. Who are these organizations kidding?

So, what can be done? The following principles, in no particular order, can help remind us to treat employees as assets rather than expenses.

1. Be truthful. Leveling with your employees is a good place to begin. With reduced revenues and soaring costs, something has to change. Owning up to this reality reflects strength of character. Use this candidness to rally the minds and hearts of your employees.

Lack of transparency and failure to state the truth is common today. Some recent examples include BP’s conflicting responses to the oil spill in the Gulf of Mexico, and Johnson & Johnson’s vagueness as to the number of Tylenol bottles recalled.

2. Be trustworthy. Integrity is the glue of an organization, and it begins and ends with trust. Trustworthiness is earned by keeping commitments. So, for example, don’t tell people that their jobs are not at risk unless you can promise them lifetime employment (and it is doubtful that you can). Someone once shared that his organization was pretty good at keeping commitments—but rarely makes any.

3. Engage employees. Managers must recognize that, no matter how brilliant and accomplished a leader, they can’t see the whole picture. Even if management could come up with all of the right decisions, employees have to implement those changes. Create cross-organizational teams with representation from all levels in the organization to drive change.

People at all levels like to be included, and getting their buy-in will help ensure ideas get implemented in a timely manner. Encourage frank and open dialogue with employees. Listening is a hallmark of any good manager because it encourages employees’ best thinking. Let people challenge a concept and have an opportunity to express their ideas. It’s amazing what happens when we cultivate and embrace ideas from our people about improving the business. This inspires ownership.

4. Communicate that improvement is everyone’s responsibility. Make improvement part of everyone’s job description. Then provide support for implementing these improvements. Give responsibility for implementing improvements to the employees making the suggestions (this is appropriate because they want to see the change happen). Encourage people to set objectives for improving key processes.

5. Focus on internal customers. Not all employees interact with external customers. However, all employees are internal customers (or internal suppliers) of other employees. Train your people to identify their internal customers and determine their requirements. Implement internal “service level agreements.” If everyone meets the requirements of their internal customers, the probability of satisfying external customers’ needs will be greatly enhanced.

6. Leverage “What’s in it for me?” Put yourself in your people’s shoes by asking the question, “What’s in it for me?” This can create improvement initiatives that are truly desired by employees. Most employees like to make improvements but are often discouraged by systems. This encourages them to park their brains at the door when they come to work. It is a lot more fun—and productive—to be engaged and have freedom to implement ideas.

7. Respect people. Treat others the way you’d like to be treated.
All employees have fear of change. Understand that it is natural for them to feel threatened. If they are currently good at their jobs, why would they want the rules to change?

Managers are most affected by change. Many attained their standing by being good at telling others what to do. Effective change management requires managers to take on new roles as facilitators, coaches and mentors. This may be difficult for those who have come up through the ranks. The key is to understand that these are the people who have spent their careers enabling the organization to be successful. Every attempt should be made to successfully transition all employees in the change process with training, career counseling and other support
when needed.

8. Drive out fear. No one can give their best performance unless they feel secure. Employees should not be afraid to express ideas or ask questions. Fear can take many forms, resulting in impaired performance. Encourage people to embrace new knowledge because it can make their work easier while yielding better job performance.

Focus on processes that need improvement rather than blaming people for poor performance. Most people are hard-working, dedicated employees. If there is a problem with their work, it is likely due to the system failure.

9. Implement an improvement initiative. Organizations must continue to improve to survive. Therefore, some consistent method for improvement is needed. If Six Sigma conveys “baggage” in your organization, then call your initiative “operational excellence” or “performance excellence” because it’s hard to argue with these terms. Commit your organization to pursue a path of continuous improvement. Create a plan and begin the journey. Delay is costing your organization money.

10. Walk the talk. Employees have too much to do. They cannot do everything that they are asked. They may decide their priorities based on watching their managers. Therefore, if manager’s don’t “walk the talk,” they will conclude that an initiative is not important. Make sure your actions are consistent with your communications.

11. Invest in your asset. We invest in upgrading machines and processes for increased efficiency and effectiveness. Conversely, we should invest heavily in upgrading the skills and knowledge of our No. 1 asset. They become more engaged, productive, receptive to change and motivated to succeed. Everyone wins!

12. Implement reward and recognition. Personal recognition and reward are powerful ways to unleash creativity and productivity. Institutionalize a program to reward the behaviors that you want to reinforce. Make it timely, fair and equitable for maximum success. iBi

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