Are people your most valuable resource? Not necessarily.

"People are our most valuable resource" is probably the most "politically correct" statement ever made, but is it true? I do not think so. This column explains why that statement needs to be revised.

In his book, Good to Great, organizational expert Jim Collins writes extensively about "having the right people on the bus" before you start a journey towards excellence. Those of you who have read his book will recognize the source of some of my reasoning in this column.

During the past five months I have asked front line leaders at maintenance organizations in countries all over the world--including Australia, New Zealand, Canada, United States, Sweden, and the United Kingdom--the following question: "How many of the people reporting to you could you send home forever without seeing a difference in your team's performance?" The answer typically ranges between 10% and 30% of the maintenance staff! Often I hear additional comments such as "it would be a great relief, and a morale and performance booster, if I could do that."

THE RIGHT PEOPLE

If this is true, the statement "people are our most valuable resource" cannot be correct. I suggest it should be changed to "the right people are our greatest resource." The wrong people are not assets--they are liabilities. The example I have cited concerns front line people; if the same rough statistics are true for managers, the consequences will be much worse. The higher up in the organization the wrong people are, the more damage they can do.

THE BEST DO MORE AND MORE

In organizations with the wrong people in front line jobs, the best performers typically do more and more while the lowest performers do less and less. If I am a front line leader, it is more convenient for me to assign the people I know will do the job well without complaining than to assign less willing and/or less skilled people. As a result, the best performers not only do more work, they also become better skilled. The opposite will happen with the lower performers. This is also typical in so-called self-governing teams. Some individuals will not take on the same workload as the rest of the team while the top performers are driven by pride in what they deliver.

THE RIGHT PEOPLE IN THE WRONG POSITIONS

Four years ago, a maintenance organization I have worked with removed all maintenance supervision and formed self-governing teams. Supervisory and planning roles became the responsibility of a maintenance contact person for each team that rotated on a monthly basis. However, research has found that, in general, 97% of people tend to be followers and only 3% are true leaders. If this is true, the organization in this example had the wrong contact person in place 97% of the time. Indeed, the self-governing teams had become very reactive and ineffective; this organization is in the process of reinstituting front line leadership positions.

In organizations with many wrong people, I believe that 70% of the work is done by 30% of the people. So, if you have many "wrong people," how can you change the organization? In most cases, you cannot do anything in the short term. Instead, look at attrition ratios and start hiring people based on new criteria. For example, set a higher value on attitudes and aptitudes than skills or the fact that the candidate lives close by or his or her father worked in the plant. If this is not an acceptable time frame for change and the situation is very bad and getting worse, you may need to consider more radical actions, such as outsourcing the entire maintenance organization.

Either way, you cannot continue to have the "wrong people" in your organization doing more harm than good. You must recognize and reward the "right people," because they are truly your company's most important asset.

Hope to see you at the 18th annual Pulp & Paper Reliability and Maintenance Conference and Exhibition in Atlanta October 18-22, 2004.

For more information go to www.paperindustrymaintenance.com.

ABOUT THE AUTHOR:

Christer Idhammar is president and founder of IDCON INC., Raleigh, North Carolina, USA. IDCON is a consulting company providing worldwide education, training and implementation of better operations and maintenance practices. For more information, go to: www.idcon.com

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