We build awesome here.
People do not die for us immediately, but remain bathed in a sort of aura of life which bears no relation to true immortality but through which they continue to occupy our thoughts in the same way as when they were alive. It is as though they were traveling abroad. ~Marcel Proust
Rest in peace.
There is a fine line between performance and effort. While effort is great it doesn’t make money. I recently watched the movie Knocked Up, which has a perfect example of this. A group of guys are creating “the next big thing” website and have spent years working on it. However, the years they have spent have been unfruitful because while they exerted large amounts of effort they didn’t actually produce anything.
People all have an intrinsic value, whether we choose to realize it or not. This value is made up of many things – skill, talent, attitude, values, relationships, etc. If we were to step back and assign a total value to each person, taking into account all things, including personal feelings and relationships, we would be able to create a scale of best to worst. We can now look at this through the economic principles of scarcity and opportunity cost.
The concept of scarcity basically states that demand rises when there is a scarcity of goods and falls when there is a surplus. When we apply this concept to people, taking into account their rating, we will see a gray area as the scarcity levels of highly valued employees shifts. If there is a surplus then companies are likely to focus primarily on performance and will place little value on effort – after all there are plenty of substitutes. However, as high value employees become more scarce we will see companies begin to shift their evaluations to be more inclusive of high effort, regardless of output.
The opportunity cost comes into play when companies have employees of similar total value but have different aggregations of composite values. For example, one person, Bilbo, may have great relationships with management, may exert total effort, but may not produce anything. Another person, Enrique, may be a top producer, exert a small amount of effort, but not get along with management at all. The opportunity cost for choosing one versus the other is the traits you will give up in one to acquire the other. If you choose Bilbo then you will have an opportunity cost of giving up a high level of production. Likewise, if you choose Enrique you will be giving up a margin of effort and harmony with management.
What this means in the end is that companies must choose the traits that are of the most value to them and analyze employees with respect to their total weighted value. Let’s illustrate with two fictional companies and the traits mentioned above.
Table 1: Weighted values of company desires mixed with employee traits.
So when we value just Bilbo and Enrique with no weights it is clear that Bilbo is the stronger of the two choices. However, this does not accurately reflect the desires of the company. To do this we will need to assign weights that represent the specific traits that are most important to each organization. For simplicity we simply assigned a value of 1 through 3 but it could have just as easily been a value of 1 to 1,000. Once we have these weights we then multiply the trait of each individual by the weight the company has assigned it. We can then sum the multiplied values to arrive at a total weighted value for each employee. The above scenario illustrates that Bilbo is the stronger choice when analyzed on pure traits but that he is only the better weighted choice for Company B. Likewise, Enrique proves to be more valuable in the eyes of Company A.
I’ve met many people that are great managers but far fewer that are good leaders. The difference is not just the matter of text books but is a real, if not tangible, aspect of life. Both semantically, logically, and theoretically the leader is distinguished from the manager by function.
The manager is set to manage a given set of tasks to ensure a specific and quantifiable outcome. Whether this set of tasks involves people, processes, or both is irrelevant as the only change is in the style of management, not the function of it. The manager’s primary tool is authority, typically vested through an organization that both managers and their subordinates are a member of. Almost everyone has had some exposure to management so this should be an easily understandable relationship to most.
Like the manager the ultimate purpose of the leader is to achieve a desired goal. However this is where the paths diverge. It is the methodologies of the leader that make the position so disparate from management. Leaders will typically have a vision, values, and a strategy that will help guide their decisions and actions. Unlike the manager these goals will not always be backed by corporate clout – there are many instances where the better leader reports to a less capable one or there is no manager at all.
So without appropriate authority how does the leader achieve goals? Through aligning followers to subscribe to common visions, values, and strategies. Look to volunteer organizations for an example of this – most have leaders and a great number of followers that remain attached because they subscribe to the vision, values, and strategy of the leadership. This alignment may come through a grass roots effort or it may begin at the top. No matter where the origin is the success of any initiative lies in getting people on board. Countless sources show that the number one reason change initiatives fail is because of an inherent lack of a culture that supports change, which directly translates to lack of leadership.
We will all run across people who are strong managers, people who are strong leaders, and the very lucky among us will find those who are good at both. It is when people see the need for change and take action that initiatives are likely to succeed. Likewise it is when people sit around and wait for managers to tell them to change that it is likely to fail. In order to illicit real change one must gain the hearts and minds of followers.
