Providing alternative sources of capital is a hot business model of late. Kiva offers a lending platform for entrepreneurs in developing countries. OnDeck provides loans outside of the banking and credit rating systems. Kickstart helps entrepreneurs raise capital through social media. GoFundMe helps do-gooders raise money for charities and causes. Capital put in the right hands makes great things happen and too often there is too much friction or outright barriers. Minimizing the friction and eliminating barriers and empowers people to do more than they otherwise can do, obviously makes a lot of sense.
For this reason it makes a lot of sense to increase the “capital” of people managers in organizations. What I mean is to increase their ability enable greater creativity and innovation from their teams, to minimize the friction and eliminate the barriers and to empower their people to do more than they can otherwise do. We hear from managers that they feel powerless to address the needs of their bestemployees, most importantly. These employees often have unrealistic expectations around frequent promotions and compensation increases, and the managers resignedly lose their best people because they lack the capital to keep them engaged.
Organizations need to invest in their managers and increase their capital to attract, manage, and retain their people—especially the best ones. They must educate and empower their managers with a new kind of capital that supplements promotions and raises that will always be in short supply.
We’ve seen companies try to address the issue by investing in employee engagement: lavish campuses, free gourmet meals, and all sorts of fun and expensive perks. I’m not sure how effective this strategy has been, but it seems to me that it’s really just distracting employees from their actual needs: eventually, despite the sushi and massages, they want career progress and more money.
And therein lies the actual opportunity.
What if organizations could better capitalize their managers with the ability to transform employee careers? What if a manager knew how to counter employee frustrations about feeling like they aren’t progressing fast enough or getting enough money and thinking they need to look for another job—with a deal that actually is more valuable than a title change or raise?
What if a manager could honestly say: let’s achieve a mission objective in the next three years and you’ll be further along in the career you want, than you’d otherwise be?
I think it obviously makes a lot of sense: a company would get the best employees and they’d commit to staying long enough to achieve something significant for the company, because it would be a significant achievement for them too.
It’s obvious—yet it is hardly done. Survey after survey prove that most employees are unhappy with their career development opportunities, and blame their bosses. Our own diagnostic identifies correlations between this sentiment and all sorts of negative outcomes. Conversely, employees who believe their managers are helping in developing their careers behave in positive and productive ways.
(There are a lot of frustrated HR, Organizational Development, Leadership Development, and Learning and Development professionals who are frustrated that they make available all sorts of resources to help employee career development, yet all they hear there are insufficient career development opportunities.)
The reason the obvious isn’t being done is that managers are undercapitalized.
Managers generally do not have the knowledge, skill, and ability, to have the conversations, creativity, and planning necessary to sincerely offer an employee the opportunity for career transformation. Without them having access to that capital, the frictions and barriers remain.
Career development depends on managers much more than companies and managers have recognized in the past. In fact, a person’s manager is secondary in importance only to the person’s own initiative and strategizing about his or her career. If you let that sink in a moment, you’ll understand why my colleague Dr. Marla Gottschalk‘s observation that “managers are the forgotten ones,” is so astute.
As is the case with under-capitalized entrepreneurs and do-gooders—the forgotten ones—the capital that managers desperately need can be fulfilled by a new platform. In this case, the complementary frameworks presented in The Start-up of You and The Alliance, is a platform to consider. LinkedIn Cofounder and Chairman Reid Hoffman, his co-authors and my partners at Allied Talent, Ben Casnocha and Chris Yeh, Marla Gottschalk, and I are very passionate about improving the manager-employee relationship in order to empower the creativity and innovation needed to make companies, and careers, successful.