On wasting talent

It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.

Steve Jobs

It always astonished me seeing people in an organization performing worse than when they’ve started. Those people are clearly disengaged and they eventually quit. The billion dollar question is how they had become so disengaged. As studies show the high rates of disengagement year after year, HR departments spend more and more on trying to engage those people back. But they are missing the root cause of this process. Even companies that study the Toyota principles fail to recognize this biggest waste – the waste of human talent. Or at least their managers deceive themselves that they have a solid reason to ignore it.

It all starts when people want to do something that is not aligned enough with the company’s goals. Well, we all know how important is alignment. We don’t want to spend resources on things that have no or little value. A good company does its cost/value analysis and decides whether an initiative in worth taking or when to cut it off. There’s nothing wrong with cutting initiatives off by the way – avoiding the sunk-cost fallacy is a crucial skill, not only in business, but there is a cost in that too.

The mistake that is being made however is neither in cost/value analysis nor in cutting off failed initiatives. It’s simply in the cost calculation.

People assume zero cost of not doing anything. It sounds logical – you don’t invest your time, the cost is zero. You invest half your time, the cost is half your earning. Simple math, isn’t it? Except that it’s not. Not investing the time may cause the disengagement, thus leading to higher cost (due lost productivity) over time. As a matter of fact, those 20% time on side projects programs are not some genius business strategy – most such projects are killed – but a way not to spend on the 8th waste. They give the needed balance between wasting time – and money – and wasting talent. Bonus points if they lead to innovation. But that’s not the goal, it’s just a side effect. So when you decide you don’t have the budget to do something – or you don’t want to – think if you can afford not doing it. Yes, you need to balance. As with anything else in life.