Boards need to understand what makes people tick by Ingrid Waterfield

Boards need to understand what makes people tick

Few boards focus on people as the beating heart of their organisation. Understanding how to motivate and empower people should deliver more efficient processes, more engaged workers, higher quality work and better customer service. Yet, a lack of focus on talent by board members risks failing to maximise the potential of an organisation’s people, its key asset.

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Board members have generally reached senior positions using skills and a mind-set focussed on the bottom line, not how performance is driven by understanding what makes people tick. While it is true most boards have an older, white male majority, their biggest problem is not their age, sex or ethnicity, but the lack of diverse skills.

Only nine HR directors in the FTSE 350 sit on the main board, as non-executives, with less than 20 on executive committees of their own organisation. Some of those are not there in an HR capacity. Yet nearly every chairman’s statement proclaims “people are at the heart of our business”. 

People want to feel respected and capable of making a valuable contribution to a business.  However below the C-suite, there is little focus on engaging individuals in this way. People are seen as an amorphous group, there to perform a function.

Board members should put as much effort into making staff happy as they do shareholders. To do that, they need to understand and engage at a personal level. I would suggest to board members they undertake regular ‘back to the floor’ sessions, to understand the impact of decisions , gain insight into what motivates staff, and re-establish a connection with the workforce. 

For me, employee engagement is all about getting staff to behave as though the business is their own. Making them feel valued and recognised for the role they play has a significant effect on performance.  One bank which pursued this kind of people-focused approach found branches with the highest customer ratings were also those that scored best for staff engagement. Interestingly. These branches were staffed largely by part-time workers, the majority of them older women. Their jobs fitted with their life, and they were committed to their roles as a result. 

The most cost-effective and motivating approach may not be employing staff 9-5 on a single site. Only by understanding the workforce can companies benefit from approaches like agile working. 

Aligning people strategy with business strategy is not straightforward, and the lack of influence of some HR directors at board level can hold this back. Businesses remain unaware that its business strategy can be derailed by failing to attract and retain the right people. 

Rarely do board meetings discuss employee engagement and its importance for the business. Also, seldom do HR directors become non-executive directors (NEDs). Corporate UK is missing a whole suite of talented people who could bring a very different view of the world into boards.

Good quality HR directors are business leaders whose remit are ‘people’. It is a critical role in this uncertain, inter-generational, digital world. Yet historically, HR directors are viewed as dealing with the ‘fluffy stuff’ that is nice to have but  not business critical.

Data analytics is helping dispel this fallacy. Evidence-based decision making allows HR directors to drive a business case for change and prove just how effective the organisation’s workforce can be. The resulting improvement in business performance means the C-suite increasingly recognises the contribution made by HR directors. However it will take time for this pool of talent to become the next generation of NEDs.

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