Organization and individual performance is only as strong as its weakest link. As such it’s important to measure the overall skills, motivation and capability present over time. It makes sense that a person with very high technical skills but is not motivated is not likely to generate a commercial success from a project he or she is given. Likewise, a very motivated individual who doesn’t have the technical capability to carry out a project will equally fail. Finally someone that can only serial process information is not likely to commercialize a global product that takes into account national influences in consumer desires, manufacturing practices, and taxes.
Summary of Human Capital Capability
A good way to visualize the overall organizations capability in these three areas is to plot each skills, motivation, and capability as a percentage of what an organization has versus what the total is that is needed. The “Summary of Human Capital Capability” figure shows this as a bar graph.
In this particular example the organization needs to hire and/or replace individuals with the skills that have been identified as needed to succeed in delivering the business end technology strategic plans. When hiring these individuals they needed the same time to find people with increased mental capabilities. These can either be early career individuals with strong technical skills that show promise to rise to stratum III, IV, or V or more senior people with the same skills that have already demonstrated the mental capability needed for success.
To reiterate once more it is extremely important that all three of these human resource elements required for business success be addressed in the human capital / resources strategic plan. If the company is struggling versus its competition it is often helpful in the human capability strategic plan to put in best estimates of what the top competitors’ human capabilities are. This allows very senior management to determine if its own team possesses the necessary leadership to build out each of these three factors or if replacing members of its own team is necessary for success.
Pyramid Of Corporate Health
Just as human capital is only as strong as the weakest link between skills, motivation, and mental capability the overall corporate health is only as strong as the weakest link between corporate capital, complementary assets, human capital and intellectual assets. This is shown in the “Elements of Corporate Health” figure.
Key is to have them all at about the same level. Not too much and not too little. Don’t want human resource expenses to be more than needed. Don’t want capability to be less than needed. Human resources needs to gather semi-quantified information to assure the balance is correct.
Another key element in corporate health is to have a culture consistent with the company’s position in the lifecycle and its values. Geoffrey Moore uses a “Four Cultures Model” as shown in the figure. To keep up with the rapid shifts in market dynamics brought on by technology adoption lifecycles, corporations must unify themselves through a common commitment to a global culture. Specifically, executive teams need to understand the following and incorporate their desires in a robust Human Capital Strategic Plan.
1. There are four proven cultures that can sustain long-term competitive advantage strategies: cultivation culture, competence culture, control culture, and collaboration culture.
2. Each culture aligns with a different value discipline, as follows: cultivation culture (discontinuous innovation); competence culture (product leadership); control culture (operational excellence); collaboration culture (customer intimacy) .
3. Each culture shines at different points in the technology adoption lifecycle: cultivation culture (early market); competency culture (early market, bowling alley, tornado); control culture (tornado, Main Street); collaboration culture (bowling alley, Main Street) .
4. Each culture creates shareholder value in its own distinctive way: cultivation culture (infectious charisma); competency culture (fierce competitiveness); control culture (relentless improvement); collaboration culture (perceptive adaptation) .
5. Each culture declares itself through characteristic global focus: cultivation culture (shared vision); competency culture (measurement and compensation); control culture (business planning); collaboration culture (customer focus) .
6. When companies merge or acquire each other, managing the transition to a new declared culture is a critical task for preserving shareholder value.
7. When cultures age, they fall prey to context overtaking core and degenerate into the following parodies of their true selves: cultivation culture (cult); competency culture (caste system); control culture (bureaucracy); collaboration culture (club) .