Back in 2008, at the beginning of the economic downturn, Pepsi decided to pour $1.2 billion over three years into a rebranding strategy that included sweeping changes to its logos, packaging, marketing, etc.

I’m always amazed at what companies choose to spend their money on – even more so during tough times.  Jim Collins, author of Good to Great, said,

“Leaders of companies that go from good-to-great start not with ‘where’ but with ‘who’.  They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats.  And they stick with that discipline – first the people, then the direction – no matter how dire the circumstances.”

I’m not sure a re-branding even qualifies as the “where” (perhaps it is part of a new vision or direction) but it definitely doesn’t have anything to do with the “who”.

It’s always been true that the one thing that will pull you out of a tough spot is people – the right people.  I know of no corporate turnarounds or rebounds that happened without a group of dedicated, competent, and resourceful people leading the way.

Yet if you look at where companies spend their money, it tells a different story. I’ve known of businesses that will invest millions of dollars in new machinery or marketing campaigns (think Pepsi!) but not invest in the people who make the place run.

Stephen Covey, author of The Seven Habits of Highly Effective People, said:

“In most organizations, they view people as an expense and the chairs they sit in as an investment.”

A Gallup poll shows that companies with engaged employees grow earnings 2.6 times faster than those that don’t. In this economy, that may mean that companies with engaged employees make it, and those without will not.

So where will you spend your money?