For the purposes of this blog I’ll expand “human resources” to include all interactions between people in a business: I.e. interactions between owners, investors, board members, managers, employees, service providers and clients. Unlike other “assets” to a company, people generally have a much broader scope and character than what the company requires from them. From the companies point of view, they are required to perform their functions, preferably at a cost lower than their cost to company (though their value to the business is often hard to define – e.g. the marketing and admin departments – crucial but difficult to quantify) and without disruption to other functions.
People do, however, generally have broader motivations than just their interaction with the company. They put importance on their social- and family life outside the company, hobbies, other endeavours etc. and as such, they have motivators competing with the company’s efforts. Note that some of those motivators may come from competing companies. Of course, there’s nothing business owners and managers can do about this. Some (those who don’t believe in pure altruism) even say that peoples interactions are solely determined by their own self-interest so their performance is determined by the perceived “good” they (or their immediate family) will derive from it.
Finding the appropriate managers/employees/investors/partners/clients requires that their interests and those of the business are aligned adequately to produce a positive interaction. Since peoples motivational interests are generally difficult to define or very broad (e.g. salary, working hours, working conditions, skill level, education, experience, product requirements, emotional connections to the brand/product/company, etc.) one needs to inject a healthy dose of EQ to determine if that person should be hired or courted as a customer. The adage seems to be “hire for attitude” and attitude compatibility can only really be defined by gut feel.
Of course there are some character- and personal qualities that can be defined or can be gleaned from definable attributes. As an example, level of education and experience is an indicator of the level of motivation to better oneself or stick at a job as well as an indicator of skill and intelligence. This is generally produces the “first draft” list of candidates for a position but this “IQ” definition of achievement almost certainly skips over suitable candidates who may not fit into the traditional definition of “educated” or “experienced”. Either way, one will never be quite sure how well a person might fit into- or change an established team or company culture.
So how does one go about designing the interactions required to run a business as smoothly as possible? Initially, by trial and error. This is often one of the stumbling blocks of fledgling businesses. At the time when it requires as much certainty and controllability as possible, it needs to deal with the relationship issues that come from a poorly defined company culture and desperate scramble to figure out the market and make ends meet. Once it has sussed out some of these aspects, it can start to build-, manage- and rely on a reputation and culture, to attract the right people and customers. And by that time, it’ll have plenty of experience in what works and what doesn’t work to draw on.