Area Economy

The cream doesn’t always rise to the top these days

November 17, 2012
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It’s hard to believe after years of high unemployment that when organizations are starting to hire — and yes, that is happening, even here in Michigan — they can’t find the talent they need. Now, that is not to say filling all jobs is difficult, but those that require advanced skills with some experience may not be readily available, or not at the price employers want to pay.

Economists warned us a number of years ago there would be a labor shortage when a high number of baby boomers retired at the same time and if the economy continued to grow at a reasonable clip. Most of us paid no attention. We paid even less attention as the economy struggled. In the U.S., we give business owners and managers a lot of credit about knowing how to make a business successful. In fact, I heard a statement the other day that being in business is basically about solving problems. It’s a little bit like going to the office every day to play Whack-a-Mole. Knock one down and another pops up.

Short-term thinking

In today’s business environment the problems crop up faster and faster and often require a new problem-solving technique or solution. We concentrate on those problems that are near us and worry about those at the other side of the board at another time. Public company managers and shareholders only seem to think about the results for the current quarter. Private companies have a little longer perspective, but even they get caught up in short-term thinking because many of their clients and suppliers are tied to short-term results.

This is not to say that you shouldn’t keep a clear eye on what is happening around you at the moment, but if you don’t have folks who are looking out a bit further, you can be in trouble as well. The key to having the two-pronged success is to clearly have the responsibility for the strategic goals fixed with the CEO and the board of directors, or in the case on a privately held company, perhaps an advisory board.

Strategy must involve people

The strategic focus has to be longer than just a couple of years. Getting the right perspective requires skill, intuition and a lot of experience. So the importance of fixing the responsibility for the long-term health of the organization with people of vision is critical. What does this really mean? It means knowing what will be required of the organization by its clients, what is happening with service or technology innovation, and what is going on with others in the same or related fields.

Those who take the time and effort to go through a formal strategic-planning process have addressed these matters. They also likely have dealt with an analysis of strengths, weaknesses, threats and opportunities. However, we find there are two elements that seem to frequently be lacking: execution methodologies with support tools and succession planning.

More than managers

For the moment, let’s leave the topic of execution. It can be a long discussion by itself. The topic of succession planning can have extremely critical implications for the organization, especially when you expand your thinking to mean having the right people in the right positions at the right time. Many organizations think of succession planning as who will fill what senior management positions when the current leadership leaves the organization. In reality there are a number of other non-management positions that will be instrumental to the organization’s success. They may be scientists, systems and IT specialists, market managers or perhaps even human resource people that bring the right people to the organization, just to name a few.

Performance programs

Many organizations have programs involving performance management and development. Unfortunately, these programs are often short term in perspective. The performance portion is a review to help determine pay adjustments or termination documentation. The development portion is often focused on correction of shortcomings or what is required to be better on the current job. Sometimes it is preparation for the next job, but this is infrequent. In some organizations, there is an element to the development program that allows the employee to gain some training on a role that has special interest to him or her. It is usually thought of as a way to retain good employees.

What is really required is to get the senior leadership to utilize the strategic plan as a tool that lets them figure out what they will need in skills and experience for all the critical positions, not just the key management roles, four and five years down the road. They need to be working with the performance management and development plan and reviewing the information it contains. Then they need to be directing the development of those who have the potential to fill the critical spots that will sustain and grow the organization. Senior leadership cannot leave this development responsibility to the middle management people. They are in a position to create developmental slots, development programs with unique placements and make sure there is funding to support their vision. They cannot take the old-line approach that “the cream rises to the top.” In today’s labor market, the cream may be scraped off by others or simply dissipate before it truly develops. They need to be actively involved in the analysis and management of their most critical assets.

Ardon Schambers is principal of P3HR Consulting & Services LLC in Grand Rapids.

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