Investing in the future - Part 5: Manpower - People

The core of the business.

The diagram below was in Part 1 and the people are at the centre because the people are the heart of the business: without them you can do nothing and even the best investment plans will fail. The human and management resources are just as critical to successful investment as are the financial resources.

You may not recognise it but we invest a lot of money in the people we employ to get the results we need. This is not only in formal training but may also be in the time taken while they learn the job and the people involved in training them to get to know the job. This was recognised by the Government and the ‘Investors in People’ scheme was launched to try to make companies aware of the investment they have and can make in their people.

Knowledge and skill based business.

In many ways the investments we make in people are perhaps the most important and yet fragile of all the investments we make. Business is both ‘knowledge basedš and ‘skill based’ - this means that the key resources of your company walk out the door at the end of their shift or the end of their day. If they don't come back your company would effectively cease to function and would probably fail. You may convince yourself that this is not true but what happens when your key employees are on holiday?

Ignore this at your peril, otherwise some day this investment may not come back through the factory gate.

Training, development and personnel

The most obvious investments you make are in the field of training, development and personnel and these are:

Training: This is about learning and acquiring knowledge and skill. It involves learning about the job (either how to do it better or how to do it at all). It is also about gaining new skills so that the company can change for the better and is relevant at all levels of the business. As an investment there are two keys to getting the best return:

What training is needed? - You need to know what the business needs, what your employees need to be able to achieve and what your employees need to know.
What is the most cost effective way of carrying out the training? - Your employees need to learn effectively and you need to get value for money.

Training is not always about external courses and a great deal can be achieved by investing the resources that you already have internally.

Development: This is about gaining skills that you will need in the future in order to take effective action to improve the business. The key factors are:

What do they need to know?
What do they need to be able to do?
How can we help the employees to acquire these skills?

Personnel: This is about the management investment in making sure that your employees work and learn effectively. The employees need to clearly understand their reporting relationships, duties, and performance standards. Investment in the personnel function must deliver this guidance and information to all employees.

A long term training plan needs to be drawn up and discussed with the employees, training records need to be generated and kept to evaluate the effectiveness of the investment. Certain aspects of this training plan will also be valuable in the attainment of BS EN ISO 9002

Training, development and personnel are investments that we make to create the skills to do the job. Without them all your other investments will count for nothing.

The easy and cheap ways to invest in people.

Investment in people is not always expensive and some suggestions are:

Catch them doing it right - Don't try to find your people doing something wrong and criticise them for it. Find your people doing something right and thank them for it. Do it simply, quickly and don't elaborate. This is harder than it seems because we automatically look for the things that are being done wrong. Try this investment of your time and see the response. It is guaranteed to surprise you - tough guys can say ‘thank you’ too.
Give them responsibility and let them respond - You have invested time and money in training your employees. Treat them like children and they will react like children. If you have to talk about empowerment with your employees then you have already blown it and any organisation that has to introduce this as a formal concept is probably too far gone to be saved by the concept. If we expect our employees to accept responsibility then we must also give them the power that goes with this. In many Japanese companies all employees have both the power and the responsibility to stop the production line if there is a problem. This contrasts with the traditional British way of working where to stop the line is the ultimate sin. Power and responsibility are totally linked, consider how you would feel if your boss gave you responsibility but none of the power to back it up, how would you regard your boss if he had the power but none of the responsibility for success or failure? The only way to retain power is to share it.
Treat them fairly - Let your gravestone read ‘He was a cruel man, but fair’.
Treat them like people - When we hire a pair of hands for our production line then we get a brain thrown in for free, it is up to us to use it! The typical British manufacturing manager thinks that fabricators leave their brains at the factory gate. The reality is that they are thinking human beings who need convincing, persuading and responsible treatment to get the best out of them. The only way to communicate is to listen.

In other sections of this series I have encouraged you to invest in the maintenance of your machines to get the best out of them. The same needs to be applied to your employees: you need to invest in a maintenance programme for your people to get the best out of them and if you don't then they will leave or not work properly when you need them most.

The Investment Series.

‘Investing for the future’ is designed to challenge your concepts and ideas on investment for the future. Various aspects of investment are considered and discussed. The series is:

Part 1: Introduction

Part 2: Machinery - Plant & Equipment

Part 3: Materials - Products

Part 4: Methods - Procedures and Processes

Part 5: Manpower - People (This section)

Part 6: Measures - Performance

Last edited: 29/03/04

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