Last night's Washington state primary results were surprising in many of the races. Some of the surprises, in my opinion, were good ones whereas others leave me wondering what's really going on. It takes me back to the presentation put on by Express Employment Professionals that I attended a few weeks ago. The presenter hit on another very relevant topic, interdependence (I talked about another one in my last blog post).
I first read about interdependence in Steven Covey's The 7 Habits of Highly Effective People. The concept is that all of us are born as dependent beings. As we grow older many of us discover our independence and work really hard to define ourselves and declare what makes us unique. Highly effective people, Covey explains, move beyond independence to interdependence. Like dependence, the individual relies on others, but does so consciously, without losing sight of the things that make him unique. Interdependent folks retain their individual identity, but use it in a way to work together with other people and their communities.
I think that our political races bring a lot of surprises because our local community is made up of a large number of independent people. I applaud the Northwest's emphasis on independent thinking and forming your own opinion on issues (though not everyone is willing to express them). Where our region falls short is in interdependent thinking. When people have to come together to benefit the greater good, either the fierce thorns of independence surface, causing passionate friction and factionalism, or the dictates of "political correctness" coats over the real issues so that everyone can feel good about the uninformed decision that is being made. In interdependence, individuals have the ability to step outside of their own self-focused needs and look at how the decisions being made today affect our region as a whole, now and in the future. We're lacking that in a region where folks vote on everything, yet are making decisions based on their own commutes or religious preferences and are not thinking about the benefits or detriments that their choices will make on other people, the neighborhood, region, country, or global community in the long term. This unwillingness to work together and find common ground on disparate issues brings many surprises.
We have some great finalists in the upcoming races who have the ability to look beyond partisan issues and make tough, informed decisions based on long-term impact. On the flip side, we have some finalists who are finalists because of their hard-lined, myopic focus on popular hot-button issues. It's the difference between being a politician and being an effective, results-oriented politician. I look forward to the next two and a half months of campaigns and hope that our region will make the tough decisions and choose candidates who are committed to interdependent leadership instead of independent factionalism.
Keeping the world connected through issues that impact urban and regional policy and development.
Wednesday, August 19, 2009
Wednesday, August 5, 2009
From Expense to Asset: How Layoffs Can Kill Your Organization
Thank you to Express Employment Professionals for hosting an educational event led by Russ Moen, VP, Human Resources. The 4-hour event, "The Leader's Role in Creating Fulfilling Jobs", took its lead from the book Three Signs of a Miserable Job by Patrick Lencioni.
One topic discussed was the value of people. In financial terms, human resources usually show up under "expenses" when looking at a balance sheet. In today's economy, many businesses are hyper-focused on the bottom line, looking at where they can best cut costs. For many businesses, employee-related costs result in 65% to 95% of all expenditures within a fiscal year. From a bottom line point-of-view, employees are a financial disaster. When times get tough, it looks like the fastest, most effective way to trim costs is to let folks go.
Our economy has changed significantly in the past 40 years. According to Moen, a review of a company's stock value in 1982 could be tied 65% to tangible assets (i.e. equipment, real estate, cash) and 35% to intangible assets (intellectual property, patents, systems). As we shifted from an industrial society into the information age, 2002 brought an average of 80% (yes, eighty) of stock value tied to intangible assets.
What happened? People took on growing value. In an information-based economy, innovation, service, and intellectual property contain the majority of a company's assets. Where does innovation, service, and intellectual property originate? In the minds of people. The information age has turned people from expenses to assets. People are your bottom line. Without them businesses cannot create value.
I think that choosing the right people for your organization applies not to the tasks that they can perform, but to the way they think. Diversity of race, religion, and gender don't matter as much as diversity in thought, creativity, and problem solving. The value of the people on your team has less and less to do with the cost of acquisition and benefits costs, but rather with the return on investment due to increased productivity, surge in innovation, increase in filed patents, and ability to be nimble and responsive to changing market economies.
The current market correction is showing how come companies have over-inflated the value of commoditized tangible assets and downplayed the value of the people and their innovations. I regularly see small businesses struggling to survive who are sitting on a wealth of intellectual property or innovative systems that they could share with the market to increase cash on hand and business value. Conversely, I have also seen many organizations bloat their books with intangible assets that don't exist.
What is the value of people to your organization? Where does their contribution to your success show up in your financial statements?
One topic discussed was the value of people. In financial terms, human resources usually show up under "expenses" when looking at a balance sheet. In today's economy, many businesses are hyper-focused on the bottom line, looking at where they can best cut costs. For many businesses, employee-related costs result in 65% to 95% of all expenditures within a fiscal year. From a bottom line point-of-view, employees are a financial disaster. When times get tough, it looks like the fastest, most effective way to trim costs is to let folks go.
Our economy has changed significantly in the past 40 years. According to Moen, a review of a company's stock value in 1982 could be tied 65% to tangible assets (i.e. equipment, real estate, cash) and 35% to intangible assets (intellectual property, patents, systems). As we shifted from an industrial society into the information age, 2002 brought an average of 80% (yes, eighty) of stock value tied to intangible assets.
What happened? People took on growing value. In an information-based economy, innovation, service, and intellectual property contain the majority of a company's assets. Where does innovation, service, and intellectual property originate? In the minds of people. The information age has turned people from expenses to assets. People are your bottom line. Without them businesses cannot create value.
I think that choosing the right people for your organization applies not to the tasks that they can perform, but to the way they think. Diversity of race, religion, and gender don't matter as much as diversity in thought, creativity, and problem solving. The value of the people on your team has less and less to do with the cost of acquisition and benefits costs, but rather with the return on investment due to increased productivity, surge in innovation, increase in filed patents, and ability to be nimble and responsive to changing market economies.
The current market correction is showing how come companies have over-inflated the value of commoditized tangible assets and downplayed the value of the people and their innovations. I regularly see small businesses struggling to survive who are sitting on a wealth of intellectual property or innovative systems that they could share with the market to increase cash on hand and business value. Conversely, I have also seen many organizations bloat their books with intangible assets that don't exist.
What is the value of people to your organization? Where does their contribution to your success show up in your financial statements?
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