Wednesday, May 10, 2006
Leverage
We use the concept of leverage all the time. It's big in real estate, stock options, and investment. The basic idea is that, with a small amount of your capital, you gain control of a larger asset. Making a down payment on a house, a car, or buying an option on a stock are examples of leveraging an investment to control a larger asset. It follows standard business principals of getting the most out of your dollar.
Yet we don't understand the concept as it relates to employees (unless they're executives - but I digress). Our companies are arranged in little boxes, with corresponding job descriptions, duties & tasks. Into these we stuff people and pay them for their time. We strive for internal integrity (see last post) among these boxes and spend (waste) much time administering fairness through the HR group. It is the height of irony that we create these boxes, place people in them, then ask them to "think outside the box". Like it or not, this is today's organization.
For the record, I don't like it. The system promotes a limited view of people and what they can contribute. It is the anti-leverage. We fill jobs by focusing on a few skills to exploit on a repetitive basis, not capture all that a person can do. This threatens motivation of the whole individual. This is anti-leverage.
Consider that by paying a person a little at a time, we focus their entire body (if not mind) on a task of our choosing. This is leverage; we control a larger asset with a little money. Further, consider the productivity of employing the person's whole attention to our tasks, as opposed to just one facet of that person. The differences in productivity, service, output, and the health of the business are profound. To leverage an employee is to engage them fully in the task. When engagement is missing, leverage is missing.
Yet we don't understand the concept as it relates to employees (unless they're executives - but I digress). Our companies are arranged in little boxes, with corresponding job descriptions, duties & tasks. Into these we stuff people and pay them for their time. We strive for internal integrity (see last post) among these boxes and spend (waste) much time administering fairness through the HR group. It is the height of irony that we create these boxes, place people in them, then ask them to "think outside the box". Like it or not, this is today's organization.
For the record, I don't like it. The system promotes a limited view of people and what they can contribute. It is the anti-leverage. We fill jobs by focusing on a few skills to exploit on a repetitive basis, not capture all that a person can do. This threatens motivation of the whole individual. This is anti-leverage.
Consider that by paying a person a little at a time, we focus their entire body (if not mind) on a task of our choosing. This is leverage; we control a larger asset with a little money. Further, consider the productivity of employing the person's whole attention to our tasks, as opposed to just one facet of that person. The differences in productivity, service, output, and the health of the business are profound. To leverage an employee is to engage them fully in the task. When engagement is missing, leverage is missing.
