The people process is more important than either the strategy or operations processes. After all, it’s the people of an organization who make judgments about how markets are changing, create strategies based on those judgments, and translate the strategies into operational realities. To put it simply and starkly: If you don’t get the people process right, you will never fulfill the potential of
your business.

A robust people process does three things. It evaluates individuals accurately and in depth. It provides a framework for identifying and developing the leadership talent— at all levels and of all kinds—the organization will need to execute its strategies down the road. And it fills the leadership pipeline that’s the basis of a strong succession
plan.

Very few companies accomplish all of these objectives well. One of the biggest shortcomings of the traditional people process is that it’s backward-looking, focused on evaluating the jobs people are doing today. Far more important is whether the individuals can handle the jobs of tomorrow. We have seen many people who led business
units well, sometimes even superbly, who did not have the capability to take the business to the next level. Too often companies wait until the financial results are in before making corrections in key leadership positions. By then, the damage is done. The results are lagging indicators; they record the past, and with a time delay to boot.

RAM: Such people process failures cost business untold billions of dollars. Here’s an unusually clear example. Some years ago, the CEO of a $4 billion chemical company invested $250 million to build a plant in Indonesia. It was part of his strategy to shift resources from a slowgrowing U.S. market to developing countries, and it made
good sense. He put the project in the hands of his Brazilian plant manager, who’d been doing an excellent job there. Early in 2001 the CEO called me and said, “Would you go to Indonesia? I’ve got this investment hanging around my neck like a millstone. Have a look at it.” I went to Jakarta, where I discovered that the situation was hopeless. The plant’s opening was way behind schedule because of construction delays. The manager couldn’t handle the contractors,
get licenses, deal with the unions, or recruit the people he needed. When the plant was finally running, he wasn’t able to sell what he produced.

Taken from: Execution The discipline of Getting things Done