Human Capital in South Africa: Is Your Company on Heroin?
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The significant drive focusing on efficiencies across sectors makes for an interesting playing field. Efficiencies are driven by the requirement for profit, shareholder expectations, and, importantly, the constant rate of change.
It’s the rate of change with the pressure of return, in the context of efficiency, which causes organisational behaviour, not dissimilar to that of a narcotic dependency. A heroin user initially reacts to an environment. Motivated by peer pressure, circumstance, curiosity, and the need for escape; the first fix begins a spiral of behaviour that ultimately destroys the human being, becoming dysfunctional, disengaged, unreliable and unpredictable.
So what motivates organisations to display the same behaviour?
Shareholder expectations, driven by ever increasing profits, are annual, and in context of business lifecycles, change as we have come to know it, is instant. It causes a reactive environment, and efficiency is the first stop for meeting disruptive change.
Unfortunately, efficiency is often misunderstood to mean streamlining of staff. After all, it’s the quickest way to cut perceptive costs and show an immediate increased revenue and profit. Why not, if we can get fewer people to do more?
It’s a reaction like a heroin high. It’s temporary, and never sustainable. In the long run, the addict’s system fails. The heroin replaces food, and eventually, the body becomes malnourished and unable to function at optimum. In the long run, driving misguided efficiency depletes the organisation of its most crucial survival and growth asset – its people – for the sake of a quick fix.
Like a drug dependency, the constant drive for efficiency will eject the positive, and keep the negative.
There seems to be a move towards trying to understanding the impact of ineffective and disengaged people in the organisation and yet, companies are at a loss (or unwilling) to make a change in lieu of short term returns.
To ensure sustainability, resilience and organisational growth, leaders need to recognise that the most critical value lever in an organisation, is its talent/human capital. It is called capital for a reason. It’s the primary asset every organisation harnesses or loses.
Change and disruption is not a bad thing. How we react to it, particularly through our people, will decide whether we ultimately survive or not. Whatever change or disruption meets organisations, the only constant is the quality, dedication and consistency of its workforce.
Efficiency is: “the state or quality of being efficient, or able to accomplish something with the least waste of time and effort; competency in performance.”
How can we possibly achieve this with a skeletal (and mistrusting) workforce? No matter the disruption, sustainability and growth centres on three things:
- Customer centricity and engagement
Ask a computer, machine or process to be customer centric and engaged. Ask for agility to meet disruption. Ask for innovation based on the changing needs of our customers. There is no replacement for human interaction when it comes to these necessities.
It’s clear from the latest global research by The Conference Board: CEO Challenge 2015 Research Paper that Organisational Culture has become the biggest area of focus and point of emphasis for many organisations, in 2015. It is further stated in the research report that: “it is clear that building an agile organisation is not only critical to meet geopolitical and macroeconomic risks but also to manage disruptive forces such as changes in customer behaviour and new and highly innovative global competitors.”
In the complexity of challenge, the solution is quite simple: when addressing a culture within an organisation, and crafting this to meet the challenge, address the following:
- Workforce engagement
- Aligned, committed and transparent leadership that act as role models
- Clear business model
- Agile operating model
- Effective and targeted communication
- Business processes
- Performance management practice
- Proactive talent management (Now and for the future)
- Empowerment of management and workforce
- Business purpose
- Reward based on performance (Meritocracy)
Rather than quick fixes, supporting unsustainable efficiency, look at organisations as organisms that need healthy habits, not dependencies.
Core to this is data and analytics.
Analytics is a clear differentiator for high performing organisations. There is a wealth of data at our disposal, and it is critical that we use it effectively, so that it increases predictability, effective risk mitigation and decision making.
This shift has seen certain roles within organisations merging, such as CMO and CHRO and, alternatively using functions with analytics expertise within the organisation. According to NAB’s Stephen Barrow, “HR staff are generally not strong on analytics and may need to delegate these activities. In NAB’s case they have formed a strong partnership with Risk, and Finance and others have partnered with their customer analytics teams to apply the same approach to their internal customer.”(Source: Accenture: Meeting the human capital challenges of tomorrow)
The base of change needed will be behavioural. It will always be behavioural. We need to change the way we do things, if we wish to stay relevant and competitive in the market. We need to change the way human capital influences and interacts with sustained business. The alignment of the business strategy and engagement strategy will be critical to defining what this behavioural shift has to look like and, the business purpose it’s linked to.
Maybe it’s time to lose the temporary high, drive behaviour that supports sustainability/growth and, get into human capital rehab? It’s incredible what a healthy organism can achieve.