“People who count their chickens before they are hatched, act very wisely, because chickens run about so absurdly that it is impossible to count them accurately” — Oscar Wilde
If you want to say in business, you need to attract land, labor, and capital.
200 years of economists have taught us that.
Set Effective Resource Objectives
To attract the right land (natural resources, the right labor (people), and the right capital (investment), you need to set effective resource objectives.
It starts with people. You need to ask yourself, how can you attract and retain good people? People are your most important asset. If your jobs aren’t attractive to qualified, ambitious people, you have an issue.
In The Essential Drucker, Peter Drucker writes about setting effective resource objectives.
Your Business Must Attract Land, Labor, and Capital
There are three kinds of resources: land, labor, and capital. Your business must attract all three.
“All economic activity, economists have told us for two hundred years, requires three kinds of resources: land, that is, products of nature; labor, that is, human resources; and capital, that is, the means to invest in tomorrow.
The business must be able to attract all three and to put them to productive use. A business that cannot attract the people and the capital it needs will not last long.”
Decline is When Good People Won’t Sign Up
The first sign of the decline of an industry is when there’s no appeal to qualified, ambitious people.
“The first sign of decline of an industry is loss of appeal to qualified, able, and ambitious people. The decline of the American railroads, for instance, did not begin after World War II – it only became obvious, and irreversible then.
The decline actually set in around the time of World War I. Before World War I, able graduates of American engineering schools looked for a railroad career. From the end of World War I on – for whatever reason – the railroads no longer appealed to young engineering graduates, or to any educated young people.”
Attract and Hold the Kind of People You Want
Know what your jobs need to be to attract and hold the right kind of talent. Challenges yoursef to think about the type of people you want to attract.
“In the two areas of people and capital supply, genuine marketing objectives are therefore required. The key questions are: What do our jobs have to be to attract and hold the kind of people we need and want? What is the supply available on the job market? And, what do we have to do to attract it?
Similarly, What does the investment in our business have to be, in the form of bank loans, long-term debts or equity, to attract and hold the capital we need?”
You Have To Satisfy the Business and the Market
You have to know what people want and what the business needs to create effective resource objectives.
“Resource objectives have to be set in a double process. One starting point is the anticipated needs of the business, which then have to be projected on the outside, that is, on the market for land, labor, and capital.
But the other starting point is these ‘markets’ themselves, which then have to be projected onto the structure, the direction, the plans of the business.”
Key Take Aways
Here are my key take aways:
- Your business must attract land, labor and capital.
- The first sign of decline is loss of attraction to qualified, ambitious people.
- Design jobs to attract and retain the kind of people you want.
- Your jobs have to satisfy the business and the people in the market.
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