Image by Kevin Decherf
Human Capital (over)utilization
Managers try to “optimize” the utilization of human capital near, or sometimes even above 100%. They think this is smart, but it really is not.
I am not accelerating… I have no Power, I have no Power!
The 24 hours of Le Mans, often called the “Grand Prix of Endurance and Efficiency” is the ultimate test in the automobile world. For those not into the automobile sports, it’s about driving for 24 hours at the limit of man and car, squeezing the best of both, without breaking either in the process.
In 2016, Toyota made an incredible car – the Toyota TS050 #5 – that after running for 24 hours, 382 laps, 5200+ kilometers, a single lap before the end, was 1 minute and 15 seconds ahead of the second one – the Porsche 919 Hybrid #2 – on the road to a certain, and by the opinions of many, well deserved victory.
Then something went wrong. The pilot said over the radio: "I am not accelerating… I have no Power, I have no Power!"
This is a warning of what to expect running at, or over 100% for far too long.
People are more complex and much, much more fragile than the finest Japanese or German engineering masterpiece. Your people, the pillars of your present and future. Running at 100% is a really bad idea because of:
- Errors – stressed-out people, working on the limit of their abilities make more errors. This lowers the overall productivity and effectiveness, sometimes drastically.
- Burnout – it damages people, and they are your most valuable asset. If you don’t care about people (such managers do exist), think of it as burning a briefcase full of cash. Then another one. And so on.
- Credit – running above 100% is a credit – you have to (a) have somewhere to borrow it from – sleep, close ones taking over something, etc.; (b) return it – catch up sleep, restore relationships/make it up, and (c) find a way to avoid depending on it, as it piles up, which is not sustainable.
- Reserve – you always need to keep some reserve – smart ones keep as much as 20% – for planned (personal development, organizational innovation) and unplanned (crises, surges, sickness) events. Failure to plan development means a sure loss of competitiveness and a slow death, failure to react to crises often means a very fast and spectacular death.
Now read the first two sentences on the page again.
Tags: business continuity, business process, human capital, strategy