5 Ways to Improve Your Company's Human Balance Sheet
February 25, 2019
In business, financial balance sheets measure the financial performance and health of a company in a variety of areas. At your company, what would that sheet look like if it were measuring the health and performance of your people? Would the “human balance sheet” show substantial profits in the areas of employee well-being, engagement, motivation, fulfillment, and loyalty? Or would it show stark losses like burnout, animosity, resentment, mistrust, and lack of organizational alignment.
Missing Out on True Potential
It’s easy to see how an unhealthy human balance sheet can lead to many different negative consequences like turnover, lack of innovation, interpersonal conflicts, poor customer service, disengagement, and sluggish growth. These issues strangle the bottom line and hold a business back. While there are many possible root causes to these problems, these symptoms often originate with leadership who lack the proper skills to effectively lead and motivate their team.
While difficult to admit, many leaders lack skills is in the area of emotional intelligence. Also known as “soft skills”. A widespread misconception posits that emotional intelligence and interpersonal relationship management have no effect on the bottom line. This notion could not be further from the truth. In fact, emotional intelligence is one of the fastest growing job skills.
Leaders who lack good emotional intelligence skills create an unhealthy and sometimes even toxic environment that erodes trust and reduces organizational speed and effectiveness. These environments put a heavy strain on the bottom line and prevent employees from developing the psychological safety needed for innovation, continuous improvement, and productivity to flourish.
The emotional intelligence of leaders has a strong correlation to employee retention, one of the largest problems companies face today. Helping your team members develop the skills they need to be an effective leader is crucial for their success. Companies who manage their culture with an emotionally intelligent and compassionate perspective, and adopt policies and development programs that reflect that view, create an environment that will attract and retain the best talent. Those that choose not to will likely lose the hearts, minds, and souls of the people who run the operations of a business.
Remember, people are the ones running the business, serving customers, and sparking new innovation to stay ahead of the competition. It is important to make judicious financial investments in physical capital to grow the business. However, without investing in culture and leadership development, wise physical capital investments are nearly meaningless to overall financial performance. It is as important, if not more, to invest resources into developing leadership so they can be effective at leading and motivating the people who make a difference day in and day out.
Millennials demand that companies provide an environment with enriching development opportunities for their employees. If they see that companies aren’t providing those development opportunities, ethical practices, and emotionally intelligent policy decisions, they either check out, act out, or get out.
Shifting to a Healthy Human Balance Sheet
When it comes to a healthy human balance sheet, culture is everything. Here are some ways leaders can improve your human balance sheet and create a better organizational culture:
When people feel heard and valued they are much more likely to connect on an emotional level. Feeling understood is critical for the formation of trust, understanding, and empathy. As humans, our natural reaction to conflict is to prove we are right. However, when we curiously listen with the intent to gain perspective, we often discover a more advanced understanding which helps build empathy.
2. Promote an inclusive culture
By acknowledging and promoting the value of people that bring different skills and perspectives, companies can foster an environment of high self-esteem and confidence, which leads to better performance and more loyal employees. When people feel included, they are much more likely to be more productive, enthusiastic, and engaged with the work they are doing.
3. Create safe space
Many work environments are places where employees don’t feel as though they can speak up, dissent, or share ideas without fear of insult, criticism, and disrespect. Without an environment that allows for vulnerability to take place, this fear destroys creativity before it even starts. As a leader, promote the notion that ideas are to be respected and recognized based on their merit. Furthermore, coach and hold accountable those who work against creating a healthy environment with their unnecessary biting criticism and non-inclusive attitude.
4. Adjust decisions to align with diverse human needs and motivations
The diversity of the modern workplace also makes it complex. As a diverse species, humans need different things. When decisions come from an understanding of the needs and motivations of different groups, leaders earn respect, loyalty, and admiration from their team members.
5. Establish a formal, structured, one-on-one coaching program
Implementing a structured coaching program that allows for regular, honest feedback and dialogue to occur between team leaders and team members is crucial for improving culture. Establishing and working on building connection in relationships with team members can greatly increase the levels of understanding, empathy, and clear communication. Without regular, ongoing feedback, there is likely to be a perpetual wall between leader and team member and little room for continuous improvement.
When organizations improve the performance of their human balance sheet, they simultaneously improve their financial balance sheet. Employees who feel valued, respected, and safe are going to perform at a much higher level than those that feel emotionally disconnected, devalued, and afraid. It is important for leaders to learn how to support their teams, meet their needs, and create a positive workplace culture.
For more information about establishing a formalized coaching system, improving your culture, and increasing the health of your human balance sheet, contact Sprout Leadership today.