Sunday, January 22, 2023

Peopleware: Part Three - The Right People

Its important to hire right people. Managers often like to think that they can turn coal into a diamond but the reality is that they neither have enough leverage nor enough time to make people to change in any meaningful way. People will remain almost the same as they were on the first day of the job so it is important to hire and even more important to retain the right people.

You don't want to hire a juggler without actually looking at him/her juggle. Similarly when hiring developers, its important to see an example of their work. Asking them to bring a portfolio of their work on an interview shouldn't be a problem. When given opportunity people like to show their work.

Diversity in hiring has its benefits but they are not free. We should value the different ways of working, thinking and communicating diverse colleagues bring to the team but more diverse a team is, more effort will be required on the manager's part to get the team to jell together. If the team keeps chaning, adding or removing contractors, then it will never jell. 

The young workers today are built different. There are generational differences that need to be understood and accomodated. These young workers were born and raised in a world with phones, apps and other things that are continously trying to steal their attention. They have gotten used to splitting their attention and will tell you that they work best in such an environment but such continous partial attention doesn't work well in a creative thinking environment. It is opposite of the flow which is essential to getting meaningful work done. It stops them and others from getting into flow. It is important for their carreers for the manager to clearly articulate the contract to them. Such periods of continous partial attentions must be thought as personal time and should be reasonably limited during the work day. 

Retaining good people is even harder. The total immediate cost of replacing an employee is almost 6 months of wages but there is a hidden cost. In companies with very high turnover, people develop destructively short term view points. They are willing to sacrifice future for smaller immediate benefits. Employees are not willing to invest in long terms goals as they don't believe they will be around to see the benefits and the company is not willing to invest in its people as it doesn't believe they will be sticking around. In such companies no body, neither company nor the employee, is willing to take the long term view. In such companies the only way to retain good people is to promote them quickly. This results in a very top heavy organization chart where most of the people are "managers" and people actually doing the work are may be 20%. It is very disconcerting that in such organizations the people actually creating the producsts have very little experience as more experienced people are sitting in management. Young people may find the idea of a quick promotion to 1st level mangement good but from a corporate perspective, late promotion is a sign of health, it means people stick around. Such organizations create higher quality products as people actually working on the products have a lot of experience.

People leave a company for various reasons but three reasons account for most: 

  1. 1. Just passing through mentality.
  2. A feeling of disposability.
  3. Loyalty would be ludicrous (not sure about this one, not a reason in it self)

The insidious affect is that turnover engenders turnover. People leave quickly because company doesn't invest in its people and the company doesn't invest in its people because nobody sticks around. More important than why people leave is to understand why people stay. People stay because of the feeling of community. Because leaving a company doesn't just mean leaving your job, it means leaving some friends, leaving a community you enjoy being part of and with whom you have developed a bond. The best organization consciously try to be best. This gives people a common goal to achieve together and to bond around. It creates a sense of community. Some companies try to explicitly engender the sense of community. A common feature of companies with lowest turnover is retraining. Retraining helps build the mentality of permanence and strong sense of community. These companies are different. There is an energy and sense of belonging that is practically palpable.

The money spent in training or retraining people is not an expense, its an investment. An investment is when you trade one asset for another betting that the new asset will provide more value in the long run. Thinking of the human capital as a sunk expense causes managers to make decision that don't preserve the value of the organization's investment. Companies of knowledge workers need to understand that this human capital is their most valuable investment and matters the most.

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