Monday Mornings with Madison

The Highest and Best Use of Your Team, Part 1

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Estimated Read Time: 6 min.

Is everyone at your company working on tasks that are the highest and best use of their time and talents?  The very best leaders aim for that goal or should.  Still, it is a goal that is a work in progress but one that is highly unlikely to ever be fully achieved.  First, most people do not work at jobs that capitalize on their most valuable skills.  Employees are usually hired to fill a role at a company and perform the tasks related to that job, even if they have extraordinary, untapped skills that could be far more valuable to the organization.   Most employers are not even aware of the hidden talents their employees possess.  But, even when workers are using their most valuable talents on behalf of an organization, it is unlikely that those skills are being applied 100% of the time.  People spend time – sometimes a lot of time — on tasks that are of moderate or low value to the organization.  And, what a person considers the highest and best use of his time and talents may not necessarily align with what others may think or what the company wants and needs from the employee.

Case in point.  Even top CEOs are known to spend time doing tasks that are well beneath their optimal abilities.  During National Public Radio host Kai Ryssdal’s interview of Glassdoor CEO Robert Hohman on December 5, 2018, Hohman admitted that he still spends time writing code for Glassdoor’s website, a task that most would agree is NOT the highest or best use of his time and abilities.[1] As the founder of Glassdoor and previously one of the employees at Microsoft who helped build Expedia, most would agree that Hohman’s time is better spent planning the company’s future and working out the sale of Glassdoor to Recruit Holdings for $1.2 Billion, not performing programming tasks that could be handled by most any software engineer.  However, Hohman sees it as therapeutic and stress-relieving.

That brings up the challenge of how to determine what is the “highest and best use” or HBU of each person’s time and talents.  If even a valuable task like software programming can fall short of being the highest and best use of the person’s time for a CEO, then clearly the value of a task is relative not only to the full slate of skills a person brings to the table but also which of those skills serves the needs of the company best.  And it raises the question of whether it is even possible for all the employees of a company to spend 100% of their time on tasks that are the highest and best use of their abilities?

Understanding ‘Highest and Best Use” or HBU

To get a better handle on the concept of ‘highest and best use’, it might help to understand where the term originated.  The phrase dates back to the early 1800s and was used in the appraisal of property.  Later, the term was adopted by Irving Fisher, an early U.S. economist, to describe in greater detail how the maximum value of a property can be calculated when considering utility.  Fisher — who died in 1947 and has arguably been called one of “the most brilliant economist the U.S. has ever produced”– furthered the idea of utility as related to maximizing productivity.  While that may seem obvious now, at the time it was a fairly new idea.  That was the first time in economic theory where utility was tied to the law of supply and demand.

In basic terms, here is how “highest and best use” works.  To determine the maximum potential of a property, developers embark on a three-step process:  a property analysis, an entitlement and constraint analysis, and a market analysis.   To be considered the ‘highest and best use of a property’, the property’s use has to meet four criteria: legally permissible, physically possible, financially feasible and maximally productive.  The economic concepts of utility and substitution are the drivers of the highest and best use analysis. The HBU of a property, then, determines its utility to a potential buyer.  A buyer will pay no more for a property than a competing property with the same utility would command, while a seller would accept no less than another seller would accept for a comparable property.  The HBU designation identifies that an asset could have a higher value if used for a different purpose.  So there are steps and standards for calculating ‘highest and best use’ of real property.

Applying HBU to People

Now consider how that might be applied to human resources.  Let’s paint a picture.  Imagine unleashing the hidden talents and untapped skills of every employee in a company.  Imagine if every employee, from entry level staff to C-suite exec, was 100% engaged in work that was the highest and best use of their time and talents and that contributed in the best possible way to the success of the organization.  Can you envision the collective power that would be unleashed?  No laggards.  No frustration.  No boredom.  Just a company filled with rising stars. Absenteeism would drop instantly.  Worker defections to competitors would certainly decrease.  Departments would start to exceed projections.  The company would become a preferred employer, and employee recruitment would be an exercise in cherry picking from among the crème-de-la-crème of talent.

Could standards and a process be created to get the ‘highest and best use’ of each employee’s time based on their talents?  Certainly, increasing productivity is always one of the key goals of every business.  But, whose job is it to get the most from every employee?   HR recruits and hires employees based on job openings and establishes policies, procedures, and programs for people management.  But few, if any, HR departments connect such elements to maximizing employee output either per dollar spent on labor costs or revenue generated per employee.  Instead, employees are hired to fill a role and do that job faithfully until such time as a manager happens to notice that the employee has higher value skills.  Even then, that person may not be moved out of their current role because of a lack of openings or other variables that keep the person locked into a particular job.

Similarly, salary and bonus programs align with market trends, regardless of whether the value of the work warrants other incentive compensation.  Training tools, if they even exist, are often secured via the lowest-cost provider method with minimal consideration given to which provider would be most effective in increasing revenue generation per employee.  Recruiting practices likewise focus on minimizing costs, not maximizing business capability/capacity.  In most organizations, people management is more concerned with executing transactions rather than increasing productivity.   For example, a partner at a law firm might continue to hunt for cases and close deals even if his talents would be of much greater value to the firm as a Managing Partner, attracting up-and-coming lawyers, optimizing technology solutions and identifying ways to nurture existing clients.   And yet, most every business leader would agree that they ideally want to have every employee focused on tasks that are the ‘highest and best use’ of their time and talents.  So how does a company go about achieving that?

Finding the HBU of Employee Time and Talent

Let’s start with the process.  The company could do a human capital development audit.  The goal is to match the roles and responsibilities of each job with the skills, core competencies, and experience of each employee.  The idea is to be as expansive and broad as possible in identifying employee skills by looking at academic training, software skills, certifications, professional development, leadership, and cultural diversity.  Basically, everything.

The idea is not only to identify past skills that have been utilized, but also to drill down to find skills sets that an employee has but aren’t being used…. and possibly have never been used.  The challenge is to identify the hidden, untapped skills.  Those skills should then be prioritized based on the ability to generate revenue, reduce cost, improve the organization’s processes, etc.

Next, an action plan is needed to put into use all of the highest priority, non-leveraged skills an employee has.  For each untapped skill, there should be a time frame for implementation, a way to relieve the employee of less important work, and identification of potential barriers that would prevent the employee from using untapped skills in a redesigned job description.

In addition to doing a deep dive into the organization’s human capital, to identify HBU in people also requires a solid understanding and control (to the extent possible) of the factors that influence performance.  Tune in next week when we will look at the myriad of factors that influence individual performance so that each person’s time and abilities are employed to the highest and best use possible.

Quote of the Week

“Great talents are the most lovely and often the most risky fruits on the tree of humanity. They hang upon the most slender twigs that are easily snapped off.” C.G. Jung

[1] December 5, 2018, Kai Ryssdal and Daisy Palacios, Corner Office from Marketplace, Glassdoor CEO says where you work is one of the most important decisions of your life


© 2018, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.

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