Principles

Companies often measure people by their workload.

How many hours did they work?

How many tasks did they complete?

How many calls did they make?

How many projects did they manage?

How full is their calendar?

These numbers are visible and easy to compare.

But they do not show how well the company uses a person's true capabilities.

An excellent specialist may spend most of the day searching for information, moving data manually and correcting other people's mistakes.

A strong leader may spend the entire week approving operational matters.

A creative person may perform repetitive tasks that could be automated.

An employee who brings precision and structure may be in a role that demands constant improvisation and a heavy communication load.

Everyone is working.

The payroll costs are incurred.

But the company uses only a small part of the capability it is actually paying for.

A working hour is an input, not value

A working hour shows how much of a person's time the company used.

It does not show what outcome that time produced.

One right decision can save a team hundreds of working hours.

One poorly designed process can consume the time of dozens of people every week.

One person placed in the right role can improve an entire team.

One bad combination of person and work can create constant checking and rework for others.

A company's value therefore cannot be assessed by how much labour it uses.

What matters is how much value the work creates for the client and the company.

More working hours can mean more value.

But they can also mean more confusion, more unnecessary activity and more of the wrong things.

Human potential is not an abstract quality

Potential is sometimes discussed as though every person has a fixed amount of capability that simply needs to be “unlocked.”

In reality, a person's performance depends heavily on the situation.

The same person may be exceptionally strong in one role and average in another.

One environment uses their analytical thinking.

Another overwhelms them with constant interruptions.

In one role, a person can use their strengths to solve a problem that matters to the company.

In another, their energy goes into work that requires a completely different way of thinking, pace or style of communication.

Potential becomes value only when a person's capabilities fit:

• the specific work;
• the role's responsibility;
• the company's stage of development;
• the team;
• the management approach;
• the decision-making authority;
• the system required to do the work.

A good person is not automatically the right person for every role.

The right person is someone whose capabilities help create an outcome that matters to the company in that particular position.

Companies often hire someone for one job and use them for another

Over time, activities accumulate in people's roles that have little connection to their original responsibility.

Someone left, and part of their work was distributed among others.

A new client required a temporary exception.

A leader asked a capable employee to take on a project.

A new system failed to work, and someone had to intervene manually.

Temporary tasks became permanent.

After a few years, a highly competent person may spend much of the day doing work they would never have been hired to do.

Management sees that the person is extremely busy.

But no one asks any longer whether they should be doing those activities at all.

Using an employee's potential does not begin with the question, “How can they get more done?”

It begins with the question, “In what work will this person's capabilities create the most value for the company?”

The right people doing the wrong work are an expensive waste

The wrong person in the wrong role is usually a visible problem.

Outcomes are not achieved. Mistakes are frequent. Other people have to intervene.

The right person in the wrong role is less visible.

They get the work done.

They learn quickly.

They compensate for shortcomings in the system.

They take on additional responsibility.

Because the outcome is delivered, management has no reason to change anything.

At the same time, the company may be using an exceptionally strong person for work that could be done more simply, more cheaply or with a different set of skills.

Their most valuable capability goes unused.

This creates a double cost.

The company pays for the person's time and loses the value the same person could have created in more suitable work.

Overload and the use of potential are not the same thing

The most capable people in a company are often given more and more work.

When something matters, it is assigned to the person who can be relied upon to get it done.

They handle difficult clients.

They rescue delayed projects.

They check other people's work.

They help the leader make decisions.

At first, this may seem like a good use of the person's potential.

In reality, the company may be turning a strong employee into its universal backup system.

They no longer build anything new.

They keep the shortcomings of other people and processes under control.

The better they do it, the more work flows to them.

Eventually, the company no longer uses the person's strength to create value.

It uses that strength to keep a broken system alive.

Constantly overloading a strong employee does not prove that the company is using their potential well.

It may show that the organisation is wasting its best capability on treating its most expensive symptoms.

Responsibility without decision-making authority locks up potential

A person can be given major responsibility while every important decision remains with the leader.

They are accountable for sales performance but cannot change the target audience, offering or pricing.

They are accountable for a project but cannot influence its scope, resources or priorities.

They are accountable for the customer experience but cannot change sales promises or the product.

The person in such a role may be highly capable.

Their potential cannot translate into an outcome because they have no authority to move the necessary levers.

They can analyse, recommend and coordinate.

The final choice belongs to someone else.

Their capability becomes a resource for advising management, not genuine decision-making capacity.

If a company wants to use people's potential, decision-making authority must move with responsibility.

Otherwise, even strong people remain stuck behind leaders' approvals.

A bad process consumes potential in low-value work

A person may be in the right role with suitable expertise yet work in a system that uses their time poorly.

They have to:

• enter the same information several times;
• search for missing data;
• wait for approvals;
• correct mistakes from the previous stage of work;
• prepare reports that no one uses;
• attend meetings where no decisions are made;
• resolve the same exceptions;
• hold the process together with personal spreadsheets.

None of these activities may require the person's most valuable expertise.

But they take away the time for which the company hired that expertise.

Improving a process is not merely a matter of efficiency.

It frees people's capabilities for work where their judgement, experience and creativity create the most value.

An unclear strategy wastes the potential of the whole team

If a company has not decided which clients it serves, which problem it solves and what kind of growth it wants, even the right people cannot apply their capabilities in one direction.

Marketing speaks to several target audiences.

Sales makes different offers.

Product development responds to the wishes of different clients.

Operations tries to accommodate every exception.

Everyone may do their own work highly professionally.

The company's overall performance remains weak because people's potential is dispersed across conflicting objectives.

A clear strategy does more than provide direction.

It increases the value of each person's work because different capabilities begin to support the same outcome.

An unclear company may have a great deal of talent on its team.

It does not add up to a shared capability.

The wrong metric directs potential towards the wrong outcome

People optimise what their performance is measured against.

If a salesperson is measured only by revenue, they may use their capabilities to close deals that bring the wrong clients into the company.

If customer support is measured by response speed, a strong problem-solver may begin to give quick but superficial answers.

If a developer is evaluated by the number of completed tasks, their technical capability may go into producing features rather than solving the most important client problem.

A person may work extremely well while the company gets the wrong outcome.

Using potential does not merely mean allowing people to do what they are good at.

They must apply their strengths to an outcome that creates genuine value for the company.

That is why the connections between the person, the role and the company's objective must be clear.

Training alone does not unlock potential

When someone's performance is not good enough, they are often offered training.

Sometimes a capability gap is indeed the problem.

But training does not fix:

• an unclear role;
• conflicting priorities;
• a lack of decision-making authority;
• a broken process;
• poor management;
• a mismatch between the person and the work;
• tools that create manual work;
• a team in which other dependencies do not function.

A company may invest in developing someone and then place them back into the same system after the training.

The person has more knowledge.

Their ability to use it has not increased.

Before buying training, it is worth asking whether the problem lies in the skill or in the environment in which the skill must be applied.

Untapped potential does not always call for a promotion

When a strong person's potential is noticed, one quick conclusion often follows: they should be promoted into management.

But management is a distinct job.

A good specialist may not create more value when their day fills with meetings, feedback, work allocation and other people's problems.

Their greatest impact may instead come from:

• solving more complex problems;
• creating a methodology;
• shaping quality standards;
• advising other specialists;
• supporting critical clients;
• building a new technical or business capability.

Using potential does not mean pushing someone upwards on the organisational chart.

It means giving them a scope of influence in which their best capabilities create the most value.

Sometimes that is a management role.

Sometimes it is a stronger and better-paid specialist role.

AI makes using people's potential even more important

Artificial intelligence and automation are taking over more and more repetitive work from people.

This does not mean that the human role is diminishing.

It means the company must understand even more precisely which work allows human capability to create more value than technology.

People are especially important where there is a need to:

• understand context;
• make a decision under uncertainty;
• assess risk;
• solve a new problem;
• build trust;
• have a difficult conversation;
• combine several different perspectives;
• take responsibility for the consequences.

If a company automates the repetitive component but leaves roles and responsibilities unchanged, employees' potential may not be released.

People simply receive more automated output to check, combine and correct.

Technology creates leverage only when the company redesigns people's work at the same time.

How can you tell that a company is not using people's potential?

Warning signs include:

• the best people are constantly correcting other people's mistakes;
• highly competent employees spend much of their time on manual work;
• employees are accountable for outcomes they cannot influence;
• people are extremely busy, but the company's overall performance does not improve;
• strong employees need the leader's approval for every decision;
• the same people always receive the most difficult additional tasks;
• roles have formed around a random collection of activities rather than outcomes;
• employees use only a small part of the skills for which they were hired;
• management does not know which critical capabilities the team actually has;
• the company hires more people before removing unnecessary work;
• people leave because their work offers neither impact nor development;
• when one person leaves, an entire function or important body of knowledge disappears from the company.

These are not merely HR problems.

They show that the company is not converting its human capital into customer and business value effectively enough.

How can a company make its people's potential visible?

1. Start with the company's critical outcomes

Which few outcomes determine the company's success?

2. Make the work required to create them visible

Which functions, processes and decisions turn a client need into a real outcome?

3. Assign an owner to every outcome

Not merely someone who performs the work, but a person who owns the outcome as a whole.

4. Map the capabilities required

What kind of thinking, experience, way of working and decision-making capability does each responsibility require?

5. Compare the work with the people

Do a person's strengths fit their actual daily work or only their job title?

6. Remove low-value activities

What can be stopped, simplified, standardised or automated?

7. Give decision-making authority with responsibility

People cannot apply their potential if they are only allowed to make recommendations.

8. Measure the outcome created

Not working hours, activity or the number of tasks, but the impact on how the company creates value.

Potential must become an outcome

A person's potential is not valuable to a company merely because it exists.

Value arises when capability reaches the right work and creates the required outcome.

For that to happen, the person must:

• fit the role;
• understand the expected outcome;
• have the necessary expertise;
• be able to make the necessary decisions;
• work within a functioning system;
• receive high-quality feedback;
• take personal accountability for the outcome.

The company's task is not to wait indefinitely for someone's potential to reveal itself one day.

Management must create fair conditions that reveal both a person's true capability and their willingness to use it.

If those conditions exist but the outcome does not follow, the person may be in the wrong role.

If the conditions are missing, the company cannot yet fairly claim that the problem lies with the person.

A company's most expensive resource is not working time

Its most expensive resource is people's attention, judgement, experience and energy.

It can be used to create value for the client.

Or spent correcting confusion created by the organisation itself.

A company does not become stronger simply because people work more.

It becomes stronger when people can apply their best capabilities to the work with the greatest impact on the company's performance.

The right people.

The right work.

Clear responsibility.

Real decision-making authority.

A functioning system.

Their combination creates far more value than simply adding another working hour.

Mikk Orglaan

Challeng.ist