In the last 35+ years including the last 15 in professional service firms where the biggest asset is “ people” I have observed that at the very first pressure on the business all investments in the long term development of talent goes out the window. That is the first cost that CEOs decide has to be cut. The very fact that it is viewed as a cost and not an investment tells you that in the larger scheme of things this is not a real priority.

Spending time on short term tactical issues, whatever addresses the quarterly results takes precedence over the longer term strategic initiatives that need sustained commitment of financial resources. It is a bit like brand building. Who has the luxury of building the brand in a recessionary environment? I have discussed this in my article on “Leadership in an economic downturn”.

What is not understood is that many aspects of ‘discretionary spending” including the provision of coaches to your key decision makers can and do deliver value even in the short term. Coaches help people make better choices, choices that can seriously impact the organization in the short term as well. The critical success factor for an organization’s success is definitely systems and processes but also the way your people think. This is not something that can be fixed in a day. It is an ongoing process and working with a coach will ensure that the appropriate behaviours are put in place to drive actions that will produce the desired results – both in the short and long term.

Some time back I had addressed a large group of HR heads and I bemoaned their inability to influence CEOs who do not quite get the link between the way their people think and learn, and the overall business strategy that they are currently driving. If people really matter how come there are no rewards or bonuses ever paid to senior managers who have invested time and energy in developing the thought processes of their team members? When I worked in an accounting firm I had raised the issue of how we value the most important assets of our clients- its people! We refer to it as human capital but treat it purely as an expense that can be reduced at the first sign of trouble. Obviously this is because there is no easy way to measure the return on investment.

In professional service firms like the ones I worked for, a great deal of time and effort is made to attract the best talent. Even more money is then spent on training them to develop all the appropriate competencies that are needed to serve clients. Many of them spend years going through various forms of training till one day they make partner. Then they discover that their technical competence (a given in a Big Four firm) alone will not help them as their limitations in the softer skills get exposed. They suddenly begin to wonder why they lost millions of dollars of business when they obviously are so smart and technically competent to do the job at times even better than the competition. They forget that people make decisions based on emotions and justify it with facts. They don’t care what you know till they know you care. No amount of training is going to help these people overcome their shortcomings. They need to be coached.

But the sad part is that between the heads of HR and the coaches themselves, they are not able to help the CEOs understand their value proposition. That is why we hear comments like ‘we are not doing well now, so we cannot afford to hire a coach”. This is a statement that a CEO of a service company with revenues of USD 100M+ made when faced with a proposal for USD 50K worth of coaching for his key talent. We still have a long way to go before we get enlightened CEOs who behave as if their people really did matter.

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