Becoming the Best Investment


Every enterprise has to be accountable for how it generates a return. While this is certainly true of large, publicly traded enterprises that are accountable to shareholders, it also applies to private companies with owners and even to foundations and nonprofits with supporters and benefactors. Most important of all, I would argue, organizations are accountable for how they develop and utilize their most valued resource—their talent—in order to become a best investment.

Best investment is the fourth of the “five bests” needed to build a world-class organization, as I describe in my latest book, Becoming the Best: Build a World-Class Organization through Values-Based Leadership. The five bests are: best self, best team, best partner, best investment, and best citizen.

Definition_BestInvestment

 

In many ways, we can think of best investment as the evidence that values-based leadership truly does make a difference in elevating performance at every level. In a very real and tangible way, best investment looks at the “hard numbers” of generating shareholder return—that is, an investment made today is worth more in the future, as measured by an increase in the stock price, plus dividends paid to shareholders over a period of time. Shareholder value is the benchmark by which investments, such as shares of a publicly traded company, are measured. Companies that fail to generate a good return will not attract capital from investors.

But being a best investment isn’t just money. In order to truly be a best investment, an organization must be a good steward of its resources, especially the people who commit their time, talent, energy, and ideas to the enterprise. Obviously, an organization must generate top-line (sales and revenue) and bottom-line (profit) growth. But that can only be achieved as a consequence of having established a best team and best partnerships, with people who are committed to becoming their best selves. These are the prerequisites of becoming a best investment.

In addition to attracting the best talent, an organization must commit to developing people in meaningful ways, such as by investing in training, expanding their knowledge and skill sets, and providing assignments that “stretch” team members to grow into bigger responsibilities. For this to happen consistently and across the organization, managers must genuinely believe that talent is the “best investment” that an organization can make, an attitude that drives decisions at the highest level.

With the right people in place, an organization can do what it does best and be rewarded for it, whether a nonprofit seeking financial support to further its mission or a for-profit that attracts shareholder investment by virtue of the return it generates.

2 comments

  • Harry, with each of these releases, the excitement for the book increases. I agree with your points here about investment in people. The impact can last throughout a career and lead to good will that can deepen ties of the organization in the larger industry/marketplace.
    Your thoughts reminded me of an article out recently about “human capital” which you might agree with – the point being that certain kinds of human capital is not capital in the terms of an economist. Specifically the human capital of the “skills” of employees. Helping, through development of people and leaders improves their skills but it is not capital owned like a manufacturing plant or an office park would be . . . skills cannot be bought or owned, but through investing in employees being more competent the “win-win” is better work out put and a more successful organization. In the end, taking the “Capital” metaphor too far dehumanizes workers.

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