What’s Your Return on People?

We have always claimed that people are the most important part of a company. Yet, accounting treats employees as an expense. Many managers act as though people are a royal pain, and maybe some are. But without people, all we have is a rusting pile of buildings, equipment and material. That being the case, the obvious question is what is our return on people (ROP)?

The C-level is vitally interested in a company’s ROI, so let’s get them talking about ROP. I guarantee the first time we mention this acronym they will stop and listen. Once we have their attention we can initiate a discussion on how to improve ROP. The one thing we must avoid is talking about things HR needs to improve ROP. If we start down that path they will quickly think this is a scam. The thrust of our presentation must be what’s good for the company.

American management consultant and author Peter Drucker said, “The best way to predict your future is to create it.” His corollary was, “If you want something new, you have to stop doing something old.” And, “People in any organization are always attached to the obsolete — the things that should have worked but did not, the things that once were productive and no longer are.”

This barrage of quotes points in one direction — innovation. But who is providing the direction? When you wait for management to tell you what you should be doing, you will most likely produce something that, by the time it is delivered, is already moving toward obsolescence.

Each of the main elements of a company has someone appointed as its chief. The CEO is responsible for shareholder value, the CFO for cash management, the CSO and CMO for revenue generation, the CIO for information management and the CHRO for ROP. Each of these people talks to the others about corporate goals and then retreats to his or her fortress and designs a response. Note, those who are truly strategic don’t ask what others want. They talk about what the enterprise needs and how the others plan on delivering their part. Likewise, you as the human capital professional must lead the human capital investment.

You know more about employee behavior than the others — if you didn’t, they would have your job. Given your knowledge of the C-level’s plans, what do you need to do in terms of underwriting the human capability to support them? As you are delivering on those initiatives, check your ROP. How is your work positively affecting enterprise quality, innovation, productivity and services? No one cares about your processes any more than you care about theirs. However, they do care very much about your contribution to ROP.

This leaves open the question, how do you uncover the best avenues for everyone to generate revenue, reduce cost or drive information sharing and value? The path should be clear: Become part of the conversation about corporate goals.

When I was on your side of the desk, I found that over time I could build relationships with the C-level officers simply by finding reasons to talk with them. When I approached a conversation it was always about their issues, not mine. What are their operating plans, pressures and barriers? I learned where I could be of assistance. If I was sensitive to their personalities and time pressures I could become an ally. Sometimes it was little more than counseling them on relationships with peers and subordinates. Other times I found opportunities to suggest ways we could plan and work together to improve their operations.

Some HR people are intimidated by senior executives. We needn’t be. They are human beings just like us. They are not all-knowing. They are striving. Everyone needs help in these difficult times, whether or not they will acknowledge it. If we are cognizant of their world, we can build mutually useful relationships.

I recall with great satisfaction when C-suite officers would say, “Counsel me on this.” I had become, if not their partner, at least their sounding board. Today, that is still how I approach prospective clients; not to sell my product but to help them solve their problems. You do the same.