“Jim, I’m a Person — Not Human Capital!”

I was meeting with the CEO of a hundred person company who had been struggling to take his company to the next level. As we spent time “discovering” I began to notice an underlying resentment—almost an anger—toward his staff. Not wanting him to over-think the answer, I asked him “What does your gut tell you is the real problem?” His face went flush as he said, “For the life of me, I can’t get the necessary progress from my human capital.”

“I smiled. Well Phillip, I have good news and bad news. The good news is I can tell you the problem right now and it will only cost you $500 and lunch. The bad news is the solution is going to take a long time and cost you hundreds of thousands if not more.”

Granted, we spent a lot more time discovering and talking out problems and solutions, but the bottom line was that “the company” had become more important than people. His people. His team. His family. His friends. He built the company on a good idea and boundless energy and enthusiasm. It was easy to attract good people as the company grew fast. It was a great place to work and the excitement had been palpable.

But now, excitement was replaced with urgency, desire with necessity, and hope with fear. Getting to the next level was daunting and although the real issue was that Phillip had reached his leadership lid—the top of his ability and experience as a leader and desperately needing leadership training—his immediate need was to stop the hemorrhaging of “desertion and frustration” in his team. In fact, sales were good and costs were well under control. The problem was that somewhere along the line he had traded his love of people for love of things—or even just for the love of being successful.

That was the first time I heard the term human capital. I disliked it then and I dislike it now. Sure it’s only a term—but the words we use define us. After that incident I started to see the term everywhere. We love buzzwords and acronyms. They make us sound smart.

Human capital is the skill, talent, and productivity that employees bring to a company. It was coined by University of Chicago economist Theodore Schultz in 1964. The term refers to capital produced by investing in knowledge. So the term is really referring to the abilities that a team or team member brings—not to the team themselves. Somewhere along the line we morphed it to mean the total ability of a person or group of people.

But again—our words do define us—or at least to other people. More importantly, some things are best left in the halls of academia and not brought into the streets. This is one of those things.

It’s all about people

Society is a group of people. Work is a group of people. School, family, church, civic groups, friends—even gangs—it’s all about people. The sooner we embrace that, the sooner we will be on our way to dealing with every situation that arises. Am I saying that every situation is a people problem? Yes—I am. Well, actually a leadership problem (or lack thereof) which is about people. How we think about our team, what we call our team, how we treat them—it all makes an incredible difference for good or ill. It will compound positively or negatively. Don’t believe me? Keep treating your team badly. With the loss of an experienced team member ramping down plus the ramp up and learning cost for a new person, it costs from .25 to 2 times the annual salary of a person to replace them. That’s expensive. That’s unnecessary. That’s not smart.

Financial problems are people problems. Either you or your team doesn’t know how to handle/spend money. Bad (or good) marketing is a people problem. Bad sales are a people problem. Even technical things are people problems. Either you serviced the equipment or not. Either you did the homework and bought the right equipment or not. Everything refers back to people.

The study of leadership and personal growth is all about people—how to grow yourself and how to grow other people. If I asked you what is your SOP (Standard Operating Procedure) for dealing with people, could you tell me or do you just wing it? The more you wing anything, the more you fail. Those that practice the art of anything are the ones who are going to take your business from you.

So what is it? Do you have a plan for working with people properly?

My mentor and the world’s expert on leadership—John Maxwell—has a great little book he wrote with Les Parrott back in 2005 called “25 Ways To Win With People.” It is a great starting place to learn and practice great leadership principles with people. I even recommend it over The 21 Irrefutable Laws of Leadership—his seminal work—if you’re not a people person. It will help you get started and be available when you need it. Not sure if you’re a people person? Take this in-depth assessment and find out.

To help you get started, I am listing the “what” from his book—the 25 ways here with no explanations. You will need to get the book to get to understand the “how” and “why.”

1. Start With Yourself
2. Practice the 30 Second Rule
3. Let People Know You Need Them
4. Create a Memory And Visit It Often
5. Compliment People In Front Of Other People
6. Give Others A reputation To Uphold
7. Say The Right Words At The Right Time
8. Encourage The Dreams Of Others
9. Pass The Credit On To Others
10. Offer Your Very Best
11. Share A Secret With Someone
12. Mine The Gold Of Good Intentions
13. Keep Your Eyes Off The Mirror
14. Do For Others What They Can’t Do For Themselves
15. Listen With Your Heart
16. Find The Keys To Their Hearts
17. Be The First To Help
18. Add Value To People
19. Remember A Person’s Story
20. Tell A Good Story
21. Give With No Strings Attached
22. Learn Your Mailman’s Name
23. Point Out People’s Strengths
24. Write Notes Of Encouragement
25. Help People Win

The more you treat your team with love and respect, the more you will move your company to where you want it. Yes—you need great leadership skills, too—but it starts (and ends!) with people.

Reflection: How do you treat your team? Ask them. Ask your spouse. Ask friends. Ask your team. And be open and candid enough to hear the answers and make the changes necessary to get to where you want to go. And remember—we are people first—not human capital.

Live long and prosper.

The John Maxwell Team

My company, The Caris Group, coaches and trains you and your team to maneuver through crucial conversations and help you take your company to the top. Call today 800-328-2390 and take your team—and your company—through the next level, to the top.