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Jason-

You raise an important question. Here is at least part of the answer, from my perspective…

Part of what makes the work that we do complex are some really key disconnects that are often interrelated and overlapping:

The Temporal Disconnect In Human Capital work there can be a great deal of time between cause and effect. If I don’t treat my employees very well, it may be a long time before that leads to anything noticeable and tangible (turnover, etc.). If I slash our training/development budget it may be a long time before the impact of that shows up in a noticeable and tangible way…although the monetary savings can be plugged into my financials almost immediately.

The Causal Disconnect There are certainly consultants and authors out there that would lead you to think otherwise, but it is largely impossible to measure and demonstrate in an exact way the monetary value of what we talk about. We can often show correlation, but correlation and causation are different things. When it comes to this work, business cases are largely theoretical in nature and the business leader that does not want to do this stuff or does not understand this stuff can find an easy way out. It is easier and safer to make decisions involving tangible, physical assets. Making real investments in human capital requires some actual courage and leadership because it cannot be captured in a formula or an equation.

There are other variables that contribute as well, but I think that these two dynamics play a big role. It is not unlike the fact that a lot of us smoke, drink too much, do not exercise regularly, do not get enough sleep and do not have a healthy, balanced diet. We all know the basics of being healthy, yet many of us make contrary decisions on a daily basis. We even spend billions of dollars on fad diets, magic pills, and cosmetic surgery even though we know that we simply need to stop smoking, eat a little bit less and a little bit better and exercise a little bit on a consistent basis.

I used to smoke even though I knew how bad it could be for me. I could enjoy a cigarette today (which was easier and simpler than quitting), while the potential cost was something that existed way out in the future. Most business leaders care about a very short window of time. Squeezing short-term value out of a system is much easier and safer than investing in long-term value…unfortunately it can doom the organization in the long-term. And this is part of why the corporate life span is still not terribly long.

I think that most business leaders know what they should do to create a thriving and vibrant organization, there are examples out there and we write a lot of articles about them. Unfortunately, many leaders continue to make contrary decisions on a daily basis because their priority is maximizing profit today.

-joe

Categories: Joe, Leadership, Management

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