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Theresa Welbourne
  Theresa Welbourne
 

The People Paradox: Keys to Business Growth Inspire Little Confidence

10/23/2007 --

Business leaders acknowledge the importance of human resources, but few believe that HR can drive business growth.

ANN ARBOR, Mich.—While business leaders recognize the importance of hiring the right people, providing adequate training, promoting teamwork and maintaining a positive organizational culture, few of them are confident that such initiatives can actually help drive growth of their companies, says a University of Michigan business professor.

In her Leadership Pulse survey of top business executives, Theresa Welbourne, an adjunct professor of executive education at U-M's Ross School of Business, asked more than 300 respondents in 18 industries about future growth opportunities at their firms.

She found that only 26 percent of executives believe their human resource department or those responsible for "overall people and culture management" currently are key drivers of growth. Moreover, just 55 percent expect HR functions to contribute to growth in the next year, even though three out of four executives say that such issues can jump-start company growth¿a conundrum she refers to as the "people paradox."

"As someone who has spent most of her career in the human resource field, this finding, unfortunately, does not surprise me," said Welbourne, president and CEO of eePulse Inc. "Rightly or wrongly, in many cases the HR function continues to be perceived as a paper-pushing function that is not directly impacting the bottom line, or in our case, not seeking out growth opportunities and pursuing them with line management.

"This simply has got to stop. It is not acceptable that so much growth potential exists that is going untapped."

Welbourne's study asked business leaders to rate the degree of confidence they have currently and over the next year that these areas will drive growth: people and culture management; sales and support; manufacturing and delivery; finance and accounting; technology, research and development; and customer service.

While people and culture management is at the bottom for future growth prospects, manufacturing and delivery, customer service, and sales and support are at the top¿with about 70 percent of executives confident that these areas would contribute to business growth in the next year.

However, when it comes to current performance, none of the six areas exceeded 40 percent. In other words, most business leaders have little confidence that any of these functions within their companies are presently leading the way in business growth.

Welbourne says that companies must utilize survey data about employees and the business to propel growth—and ultimately boost leaders' confidence that it can be done.

"With this type of data, companies could engage in healthy dialogue about driving business growth and then develop a strong set of solutions and actions," she said. "Data should be regularly collected, analyzed and used to supplement other data—sales, financial, production, etc.—in order to continually understand the drivers of growth and productivity."

Started in 2003, the Web-based Leadership Pulse measures the effects of key resources and confidence levels on overall business growth and performance. For more information or to participate in the Leadership Pulse survey, contact Welbourne at (734) 996-2321 or visit www.eepulse.com.



For more information, contact:
Bernie DeGroat, (734) 936-1015 or 647-1847, bernied@umich.edu