The 1st lesson finance students learn is time value of money: $1 today is worth more $1 tomorrow. It's simple--if you have a dollar today, you can invest it and earn more than if you invest that same dollar tomorrow. Sure there may be gains and losses along the way, but money is more valuable to you and me today than it will be tomorrow.I've often thought the same thing about talent. Maybe it's that I was one of few people in business school who thought HR mattered (only later do investment bankers realize they need HR expertise too), but there's an important correlation here: your talent is worth more today than it will be tomorrow.
Let's say you've got a new hire who's fresh and excited to join the team. He's a high potential, so even in a tough economy, he had other offers and you had to sell the value of your organization, the position and the experience he'll gain in the role.
The newbie starts the following week with high hopes. He's ready to experience what he was promised. This is when he's most valuable--and when you need to invest. And from this day forward, you need to monitor, manage, recognize and challenge that investment.
I often have conversations with talented young professionals who are so eager to exceed expectations. They come in the door in a new role and start producing above and beyond those expectations. Their managers are pleased that the new professionals are self-sufficient and go along their merry way. They let the investment sit. And when you don't manage an investment, it won't grow. Their managers have forgotten that once you make an investment, you can't leave it alone. You have to shape that talent investment along the way.
Imagine if you had $1000. You're too lazy to put it in the bank so you put it under your mattress where it sits. Two years later you find that $1000 and finally put it in a savings account. You'll start earning interest, but you've lost the two years of interest you would have earned if you managed the investment from the moment you had it. And if you go so far as to forget you have the $1000? You may have missed a key opportunity to invest that money, or worse, lose it completely.
The same goes for your talent. These young professionals I talk to want to be managed. I am not talking micro-managing their every move, I'm talking attention, recognition, tests of faith. They want you to let them grow and try new things, even if they're not quite ready or, most importantly, even if you're concerned it will impact your reputation. If a professional knows his boss' reputation is on the line, and it's been made clear that the boss is going out on limb, imagine how much harder the professional will work to make the endeavor successful.
I could have taken that $1000 and put it in GM stock two years ago, losing its value completely today if I made the investment and then ignored it. Or I may have made the investment, and kept an eye on the company and industry, selling the shares just in the nick of time. I would have lost a little money, but now I have a chance to make it back.
So when clients ask me how to approach these conversations with their bosses, wanting more money, responsibility, or better titles, my response is always this: "Think of yourself as a stock."
When you go to buy a share of stock, you may look at past performance but you're really making the choice based on how you think the stock will do in the future. After all, that's what a current stock price reflects--how investors think the company will perform in the future. You're evaluating whether you think the stock will grow in value and perform at a rate more than its worth at its current purchase price.
That metaphor is easily extended to that young, eager professional who thinks he's rocked his job for the past six months. I advise him not to go to his boss and say "I deserve to be promoted [or paid more] because of what I have been doing for the past six months." I tell him to focus on the level he's currently performing at and his value for the future. I advise him to think about what can he say, offer and do to show that his future value is much higher than the investment he's requesting (title, project or raise).
See, if you invest in someone today who has strong value potential, you start getting a return more quickly. If you don't, that high-potential employee gets frustrated, bored and will leave before you have a chance to get the highest return possible. Wait to buy that stock much longer and you might lose the opportunity completely.
Let me put it this way. I took a risk and bought Apple stock a few years ago at $64.00. It's trading in the high $200s now. As long as I keep an eye on that investment, I'll have made some some sort of return. And the fun of watching that investment grow, watching how it's impacted me, and how what I have learned from that investment impacts other choices I make means it's all worthwhile. Imagine how that feels as a manager.