Are People Really Your Greatest Asset? - Part 1

In Part 1 of “Are People Really Your Greatest Asset?” we’ll look at the first of three steps toward building “people portfolios,” using financial investing principles.

Many employers say the people in their organization are that organization’s greatest asset. Do they mean it? Do they demonstrate it? What if there were an objective model to assess people portfolios within the workplace? In this way, more employers could more easily practice what they preach.

Some years back, I consulted to a company that seemingly did everything right. They knew what their customers wanted and were able to evolve their technology to meet those needs. Each problem had a solution, each opportunity had an offering, and execution-focused teams could work out those solutions. Until they couldn’t. The pace of disruptive change overtook their approach and many on their teams couldn’t adapt. What served the company well in the past wasn’t going to cut it anymore.

Our design group was good at getting things done, but we were also able to adapt to the pace of change. For the most part, we had healthy creative tensions between different team roles and also between different personality types. Through these tensions and differences, we were able to produce a whole that was greater than the sum of its parts. As I look to articulate what we did rather subconsciously, I’m struck by how similar our “people portfolio” modeling aligns to financial portfolio modeling.

Allocate, Diversify, and Rebalance (ADR) is a tried and true investment model that you can apply to your workforce. Whether you lead a group of teams or manage a single team, employing this model can energize individuals and teams, surface a wider array of ideas, and reveal better and better ways to execute upon those ideas. What’s more, we realized a revenue-to-labor ratio better than 5:1 and year-over-year labor cost reductions of 4% — for 8 consecutive years — when combining ADR with other people-first practices.

ALLOCATE

Allocating is distributing for a particular purpose.

Think about your wardrobe for a moment. Depending where you live and travel, you likely have a variety of clothing to accommodate changes in weather: warm clothes for cold, light clothes for hot, and at least an umbrella for when it rains. When investing money, allocating across just three basic categories (domestic equity, foreign equity, and fixed income) has shown the risks of losing money in one category are usually offset by gains in another.

Core Allocation

As a leader or manager, you probably allocate across a variety of roles and skills already. But there’s a lot more to people than their assigned roles and learned skills. Are you finding that everyone approaches challenges in a similar way, maybe even the same way they have for years? Does it feel like your team has gone from working in a groove to getting stuck in a rut? Then it might be time to look at some role-agnostic characteristics and “soft skills” that don’t always appear on job descriptions. When you do consider these other characteristics, finding an effective balance between them will help you to draw on a variety of strengths from a variety of team members.

For example, some people will dive into what you ask of them without questioning, while others will ask a great number of questions about your request, and most people will land in different places on the questioning spectrum at different times. There’s value in all of this, no one is behavior is wrong, but you probably won’t have a decent balance on your team if everyone is in the same place at the same time.

In building your model, the characteristics you choose should represent the 3-4 key dimensions of what your group provides for your organization. Let’s imagine you lead a group of teams responsible for creating and maintaining the customer digital experience at a large company. Your teams provide new digital offerings and solve problems for in-market digital products and services. Here are the key dimensions you’ve identified, as well as the range of behaviors you need:

Sample workgroup dimensions with ranges of needed behaviors

It would be great if everyone in your workgroup could cover the full range for each dimension, but that’s not likely. We all have strengths and weaknesses. So let’s take a pass at how important each dimension is, to establish a framework for our teams’ character and to draw on a variety of strengths from a variety of people.

Problem-Solving is clearly the core capacity your teams need. Style is the next consideration, given that each team needs to coordinate with other teams. And, while still a key dimension for your teams, Approach is the least important of the three. The allocations you set up depend on a variety of factors, including your firm and department’s purpose, age, maturity, size, and even industry. Be sure your most important dimension receives the greatest allocation. In our example, that’s problem-solving. Here are some possible models:

Possible allocations for needed behaviors in different situations

When investing money, people usually look at their goals, timeframe, and risk appetite to inform which model is right for them. Toward a retirement goal, a young person might invest more in equities and less in fixed income, while someone in retirement would likely do the opposite. When investing in people, a startup is likely going to behave differently than an established business (but not necessarily) and businesses should consider a variety of factors when constructing their models as well. Determine your particular asset allocation by your goals, which should drive your strategies, and suggest the model or models you want to target.

Goals drive strategies, which suggest your target models

Sub-Allocation

Asset allocation for financial wellness doesn’t stop at three basic categories. It goes a level deeper. Investors and financial advisors look at even more granular factors. When you allocate across your people portfolio, think about secondary characteristics as well. Some may be subcategories for the high-level categories you’ve already defined. In our example of a digital experience group, we wouldn’t want everyone to be just an idea generator. You’d want a balance of entrepreneurial energy, decision-making diplomacy, results-driven task-mastery, and more. Here are some characteristics you might want to consider:

Let’s imagine that the goals and strategy for your digital experience group reveal that a mostly entrepreneurial and malleable workforce is key to your success. At the same time, you’re still responsible for products and services in market that need evolutionary care. You need people who can innovate and take risks and you need people who can champion consistency and more conventional values. While everyone can’t do everything, some people are able to adapt, so be careful not to overly box everyone into an extreme, unless they truly belong there.

Possible sub-allocations by secondary characteristics

Leaders and managers should build people portfolios together, since some aspects of doing so are more strategic and others are more tactical. Sharing perspectives will help to build a stronger model and to execute it well.

I encountered an interesting situation not so long ago, where c-suite leaders had a clear view of vision and mission, but needed leaders closer to the people doing the work to help form goals and strategies. Even those “closer” leaders didn’t know the people employed to execute on the work as well as their managers did. In fact, many nimble and adaptable employees were assumed to have only those qualities that their leadership had seen. Until we fostered key connections and communications to bridge three levels of oversight, the firm was stuck where vision and mission met goals and — even more — where strategies and models met tactics. Your people portfolio model can only be as good as the goals and strategy that inform it.

So, that’s how to begin. By allocating, you’ve taken your first steps toward building better people portfolios. Now, what if you could go even deeper, removing even more risk? See Part 2 of “Are People Really Your Greatest Asset?” to learn about how to Diversify & Rebalance as well.