The People Side of Business

Kevin Holland pointed to an interview in the New York Times with Eduardo Castro-Wright, who is Vice Chairman of Wal-Mart. Castro-wright was somewhat critical of the status quo in the business world, including taking shots at vision statements, off-site retreats, and traditional business school curriculum.

On the business school side, he argues that they teach lots of courses about accounting, finance, strategy, and operations, but not so much on teaching people how to deal with real problems, like an employee who tells you that his marriage issues are affecting his work performance. Castro-Wright said:

I think that business schools could do more to prepare kids to deal with the often more difficult side of business management and leadership. The balance of courses is probably weighted to the numeric side of business as opposed to the people side of business

This statement probably works for every advanced degree. Every profession spends a lot of time training for the profession, but very few teach us how to deal with each other as people. Why? I imagine the people who created these advanced degrees assumed (a) dealing with each other as people doesn't drive the professional results we expect, or (b) they are important but it's not our degree program's responsibility to teach them; you learn those things elsewhere.

The (a) answer is becoming more obviously false these days. We're squeezing efficiency out of everything, and I think we'll find more and more that improving the human side of organizations will start to generate relatively more productivity as compared to what we can get out of process, or technology, or equipment. And the (b) answer just isn't true–we're not taught these things. At least not to the degree we need to be. We learn high-level lessons from a variety of contexts, but these are not enough to produce results at work. We are taught that trust is good and micro managing is bad, but we don't REALLY know how to apply these ideas. They are complex and nuanced.

I think the most competitive organizations are going to be the ones who figure out how to build on-the-job learning programs focused on the people side of organizations.

4 Comments

  1. 26.05.2009 at 4:01 pm

    Teaching human relationships is messy business and considered the soft side of business. As a 70’s era humanist, I have watched as managers ignore human emotions and relationships as impediments to getting the job done – to their detriment. All of the research shows that most people leave their jobs because of the their bosses – that’s why I changed jobs several times. American business people still don’t place a high enough value on people and their relationships. If you can solve that problem you will have the better mousetrap (and become very, very rich).

  2. 26.05.2009 at 4:52 pm

    Amen, Leslie. Though it is a bit frustrating because for the most part we have these mousetraps built. The Organization Development field has been developing and implementing them for decades. It’s like we show them the mousetrap and they say “What’s a mouse?”

  3. 28.05.2009 at 1:50 pm

    Great comments as always! I too believe that business schools need to focus more on the people side of the equation, as it is definitely a key factor in the overall results of an organization.
    I also see an interesting phenomenon in this area in my practice; it seems when the “people” side of the equation comes up with executives, I often get pushback based upon the “slippery slope” philosophy. In other words, the thinking is if we focus on people we will quickly become too soft, allowing employees to walk all over us and culminating in a culture of entitlement and little accountability. They are afraid to even step in a little in this direction, so they remain completely rigid, focused on nothing but financial results, techical outcomes etc…
    I really don’t know why this exists, the only thing I can surmise is a fear of the unknown – they’ve never tried, so it scares the heck out of them.
    If B schools (and other training grounds)were to start emphasizing it more, this may be something that changes in the thinking of Corporate America. Of course, it wouldn’t happen quickly, but over time this shift could be made.

  4. 05.06.2009 at 7:49 pm

    I am a Master’s student in Organizational Psychology, a manager in a business and a 60’s era humanist. The reason I chose this course of study is exactly what you are saying – the human side of business does not exist any longer. There are few companies who actually take into account the contribution the human side makes to business, let alone how to appreciate and protect those contributions. It has become about the bottom line only and how much more work they can heap on those that still have jobs, while trying to make us all believe we are lucky to be working for them, so we dont need appreciation, traininig, wellness retreats, communication or benefits beyond what they have to offer. It has become a free for all for employers to replace employees who leave because they are unhappy or unappreciated or unchallenged, with ones who will work for less and ask for nothing but the honor of working for said employer.
    Unfortunately, this is not reality for long. Turnover costs money and sooner or later it impacts on the bottom line as well. The employers who have employees that are loyal and dedicated are the ones that give back. There arent many, but there are a few and every company who wants to succeed should take a lesson from those who really do.