Exploring the Gap Between Knowledge and Execution.

How wide is your execution gap?

According to the new book, Play to Your Strengths, human capital is the biggest investment about which management knows the least.

Each year, the typical American company invests 36% of their sales in their human capital. ¹

Despite the scope of this investment, most companies struggle with processes for providing measurable returns from their soft side.

We see regular headlines describing layoffs and cutbacks. While that approach may be necessary, how many organizations can successfully shrink their way to greatness? Is is possible that the need to shrink is a result of ineffective processes for leveraging this least understood investment? The graphic (below) illustrates one potential opportunity for boosting return on human capital.

The Execution Box

Organizations typically hire for skills and knowledge. They then fire and promote on the basis of attitudes and habits. In attempts to improve return on human capital, most organizations spend time and money developing skills and knowledge; the left side elements. However their failures and terminations typically result from factors on the right side of the diagram.

Knowing Side

Most organizations spend their time and money developing the left half of the diagram.

S

Skills

A

Attitudes

Doing Side

Most shortfalls, failures and terminations result from deficiencies in the right half

K

Knowledge

H

Habits

Consider the typical shortfalls:

remakes/re-dos
Late deliveries
lost customers and opportunities,
delayed execution
slow innovation
terminations of poor performers

Can these be attributed more to lack of knowledge or lack of execution? Are knowledge and skills of your workforce critical to success? Of course! But, what are we doing to address the real cause of the typical shortfalls?

When it comes to developing productive attitudes and habits, most managers don't know what they don't know. Performance and execution suffer and everyone wonders: How do we change this? All too often, we restart the same cycle. We fire, recruit, hire and ramp-up new people while hoping their attitudes and habits will improve.

The cost of replacing a professional employee costs the typical organization 1.5 times their annual salary.

Inaction due to concern for this fact has it's own opportunity costs.

Human capital is the biggest investment about which management knows the least. ¹

Multiply your top line by 36% (or use your actual cost of human capital). How effectively are you leveraging this investment? If your organization could discover new ways of closing your execution gap, what would it do for your bottom line?

Tom Lemanski of Vista Development serves as an executive coach and performance facilitator. He works with clients in a variety of industries to strategically develop their key performers. Vista's clients report measurable improvements in their ability to manage, sell, grow, innovate and profit.

¹ Play to Your Strengths by Haig Nalbantian, Richard Guzzo, Dave Kieffer, Jay Doherty, McGraw-Hill Trade; (September 12, 2003)