What do Risk Management and Asset Management have in common with People Management? Not much you might say.

The tagline “Our most valuable asset is our People” has been overused to the extent that it now sounds more like a “cliché”. How many companies have really captured the true meaning of this phrase and in practice how effective are business leaders at managing their greatest asset? The truth is that many companies chronically put this asset at risk by underestimating the impact that leaders in their organisation have on their teams and their customers on a daily basis. A leader, i.e. anyone who manages at least one person in an organisation carries 50% of the responsibility and accountability for their team’s performance and them achieving their targets. Here are some of the most common people risks that businesses face when they neglect the quality of their leaders or leave it to chance:

• Hiring skills and qualifications who do not fit in your company culture
• Favouring external hires to internal mobility and growth opportunities
• Appointing leaders without prior assessment, coaching or mentoring
• Promoting high performers as a retention strategy out of fear of losing them
• Not weeding out and reprimanding toxic workplace behaviours
• Not planning transitions and succession especially in critical roles
• Ignoring ‘high potentials’ or losing them to competition
  
  

It is no secret that successful businesses are quite effective at managing their financial risks and most experts will advise you that being financially sound and resilient is a prerequisite for sustained business growth and expansion. Based on experience, I would argue that getting the WRONG people IN and the RIGHT people OUT will have more detrimental consequences on your business in the short, medium and long term.

How confident would you feel if you were told that the surgeon who is about to operate on you has not received any training for the last 3 years? How safe would you feel if you were told that the 520-seat Airbus you are sitting in is in the hands of a 2-seater aircraft pilot? What a scary thought!

Why then do many companies find it perfectly normal and acceptable (and fair) to promote high performers to Leadership positions when their people management experience is limited to supervising seasonal interns? How can business leaders find it normal and acceptable to appoint new Managers without any relevant assessment of their readiness to manage a team and no prior training whatsoever?

Some companies even appoint new leaders and then put them on fast-track leadership development programs. It is similar to giving someone the keys to a very expensive sports car without a driving license or enrolling them on a driving test after they crashed the car.  Wiser after the event, we then try to find something wrong with the driver or the car.

According to surveys worldwide, the no.1 source of frustration and disengagement amongst employees is the incompetence of their direct manager. The incompetent manager is often unable to gain the trust of their team and micro-manages instead of promoting collaboration within their team and making them grow. A good performer rarely becomes incompetent overnight, not in the same position at least. On the other hand, it is highly likely to happen if we promote them to their level of incompetence without identifying their development needs and helping them to close their skills gaps. Managing other people does not come naturally to most people and it is highly risky to assume that it is the case, even for the best performers in the organisation.