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Home > Blog > Are people a cost or an investment in your business?

Thursday 29th Mar 2018

Are people a cost or an investment in your business?

People strategy; identifying your people gap

Over the past few weeks I’ve had some great conversations with business leaders and owners about unlocking their people potential, and one common thread, irrespective of industry, business size or shape, is that ‘people’ are one of their greatest opportunities but also one of their greatest challenges when leading a business.

Get it right and it can catapult your forward in realising your growth ambitions, get it wrong and it will set you back 6-12mths on your growth journey.


With this in mind, I’m going to focus the blog for the next couple of weeks on the end-to-end lifecycle of a people strategy; from identifying your people gaps (covered in this blog), to building a robust people pipeline, to hiring talent, to growing and developing your people and ultimately retaining them.

your end to end people strategy

But before I get into the detail, let me ask you a simple question…

Are your people a cost or an investment?

When I ask business owners, business leaders, and entrepreneurs what their biggest asset is, I routinely get the response ‘It’s their people’.

Yet most businesses don’t act that way. There is a disconnect between words and actions, reflected in one significant phrase: Human Resources.

The very term demotes people from being intuitive, instinctive, clever, and innovative individuals, to merely being a collective resource at the company’s command.

This attitude plays out elsewhere too: on a company’s profit and loss statement, people typically fall into the category of ‘overhead’ not ‘investment’.

Your people are one of the most powerful forces available to you in realising your goals and ambitions, and the way you culturally think about your people strategy is critical to your commercial and business success.

I’ve talked previously about how your compelling value proposition (CVP) is a key differentiator for your business in achieving competitive advantage.

Similarly, in your people strategy, your key differentiator is your Employee Value Proposition (EVP).

Your Employee Value Proposition (EVP)

Your EVP is the balance of the rewards and benefits that are received by your people in return for the skills, capabilities, experiences, and performance they bring to your organisation.

It must be unique, relevant, and compelling if it is to act as a key driver of talent attraction, engagement, and retention and it should be viewed as one of your most compelling and exciting tools to inspire and motivate your people.

A compelling people strategy is not just a ‘nice to have’ in your business growth strategy; it is a ‘must have’. The success of your organisation is hardwired to the productivity of your people, and since that calls for them to contribute their whole self, there is an absolute need for a strong, compelling EVP.

In building your EVP, it’s important to consider the entire end-to-end lifecycle of your people strategy and it all starts with identifying your people gap.

Do you have a people gap in your business?

Identifying your people gaps is imperative if you want to grow your business in a sustained, controllable way. Undertaking a gap analysis will help build a clear picture of whether you have the right people on board today and where there is a need for new hires aligned to your vision and business growth strategy.

But where do you begin?

Here’s an exercise for you to complete;

Step 1 – Translate your Strategic Plan into your current organisational design

Take your ‘big picture thinking’, your aspirational goals and growth ambitions, the ‘we will be here in 3 years’ time’ thinking and consider how this translates into your organisational design.

3 steps to improve performance

For example, today you might not have a dedicated person whose sole responsibility is customer strategy or marketing. Are you going to create a new role within your organisational design or merge the ownership into an existing role?

Or finance and governance may not be your strong point and as you grow you want a secure pair of hands and eyes in this area. Are you going to create a new role or look to out-source to an expert?

You start to strategically think about your people hires against your growth plans as opposed to tactically thinking about your people hires i.e. I need to fill this role because person x is leaving/left. Yes, you may need to fill that empty role, but before you do, just sense check the role is right for your business for the next 12 months (or against a time frame aligned to your growth plans).

Step 2 –  Ask yourself the question; Is our current organisational design function or personality driven?

There is a fundamental challenge, which happens in all businesses over time. They stop viewing their organisational design from a functional perspective where roles are defined by the skills and attributes they need people to have, and allow themselves to become personality driven.

The challenge with personality driven design is it can be emotionally driven; not always in the best interests of the business and certainly not based on the ‘best person for the role’.

Scenarios play out similar to these…

Frank is the Managing Director’s best friend, so we need to give that role to him, or Sarah has been really loyal to the business, we know she is not right, but we need to keep her on.

Organisational designs get increasingly complex over time because companies tend to adapt the ideal design to fit their people rather than finding people who fit an ideal design.

It’s counterproductive and often leads to compromises which make it harder to achieve your aspirational goals.

So here’s what you can do.

Once you’ve reviewed your current organisational design in alignment with your strategic plan the next key step is to remove all personalities from the boxes on your organisational charts and focus only on the functional requirements of each role.

people strategy; identifying your people gaps

Ignore for now that you have a salesman named Steve, who is currently working in face-to-face sales and instead, define the skills, experience, and qualifications an ideal salesperson would have if that role was fulfilled to its greatest potential.

I’ll make a prediction right now: completing this exercise will have a profound impact on your thinking.

Once you have an aspirational picture of your organisational design, from a purely functional perspective, overlay your current roles and people to examine whether your real requirements match your current design.

In most organisations it won’t be the case at all.

Redesigning from scratch gives you clarity to identify the need for additional skills training, or transfer of knowledge, to reassign people into new roles, or hire new people altogether. It gives you a strategic people plan aligned to your business growth plan.

Any early stage business owner, business leader, or entrepreneur, by completing this exercise, will see their name in many of the functional boxes. That’s normal, but it’s also a warning for the future.  You cannot grow your business if you are sucked into performing too many operational roles so it’s important to consider succession planning for you as you work through this exercise.

So, in summary…

Do you view your people as an overhead or as the lifeblood of your organisation?

How you view them will determine how you create your people strategy.

Please comment below with any ‘people’ opportunities or challenges you are currently facing or any specific ‘people’ topics you would like me to cover.

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