We human beings are notoriously bad at making choices today that will serve us well in the long-run. I know I should exercise, but I’m too busy today – I’ll do it tomorrow. I also know that a luscious looking dessert will blow my calorie budget for the day – but I’ll do better tomorrow.
Put a bunch of us human beings together in an organization, and add impatient investors to the mix and the propensity for “short-termism” can become truly dangerous. When I have (anonymously) polled audiences on the extent to which short-term thinking represents a danger to their organization, typically a majority of them say it’s a serious – or even potentially fatal – problem.
We see this problem in spades when we work with our HR clients. In addition to the normal propensity to pay too little attention to the future consequences of current decisions, the “people side of the business” also suffers from profound mis-measurement. Although CEOs are fond of saying “our people are our most important asset,” in reality an organization’s people – and investments in those people – are measured as costs, not assets.
Moreover, because most HR departments have little capacity for bringing fact-based analysis to bear on their decision-making processes, they tend to suffer from chronic overload. One program gets piled on top of another, with no way of knowing which ones really matter, which ones don’t, and which ones may actually be harmful.
Metaphorically speaking, this is the equivalent of a badly near-sighted captain steering a ship with a bunch of instruments that are often (but not always) pointing in the wrong direction. The lucky ones end up being only modestly off course. The less fortunate endlessly swerve back and forth in an attempt to get back on course. The unlucky ones end up shipwrecked.
If this scenario sounds familiar, your HR function is firmly in the grips of the tyranny of the urgent.
Escaping it requires better instruments – those that consistently point the ship in the right direction, thereby compensating for the organizational myopia that contributes to dangerous short-termism. That’s why the emerging field of human capital analytics is so exciting. It holds the promise of helping HR functions escape the tyranny of the urgent – and in so doing, improving the lot of stockholders and employees alike.