Companies fail badly at using their human capital base to go after big business opportunities that create immense business value.
And it’s not for lack of talent.
Human capital is the most expensive asset pool companies assemble and use to run their business. And yet, ROI on human capital is abysmally poor.
The hidden loss is huge.
Now imagine this alternative: You get smarter on mining and deploying your company’s human capital assets. Your company achieves enviable business results with a considerably smaller workforce, saves significant human capital costs, increases operational efficiency and profit margins, and outperforms competitors. All good, right?
Why, then, do so many companies leave all that money for others to grab?
I’ll highlight the key problems—
Poor Mining: Companies just don’t have a clue what talents, skills and potential for impact people at the company have, which means (a) they don’t know what people can do (and what they’d want to do), and (b) where and how they would make the biggest business impact. People, similarly, don’t know what skills and talents they possess and how and where across the company they can be applied. This causes an internal market failure because markets can’t work without good information.
Poor Deployment: Companies can’t deploy the right people across the organization to work on the right business opportunities; and people can’t get themselves to work on the projects or teams where they can generate the highest value. Given poor mining, this internal market failure is inevitable.
Poor Retention: Employees are poorly deployed to roles, projects, and teams. And as data show, poorly-matched employees tend to struggle, under-perform their potential, become unhappy, get disengaged, and, ultimately, leave.
Poor Infrastructure: Companies use outdated IT systems (that do exactly what old IT systems do) which don’t provide the company and its employees the tools they need to drive optimal human capital mining and deployment.
Fixing these problems is a strategic imperative.
As the pace of innovation and competition intensifies, using your human capital base to generate new operational and strategic business value holds the key driver for growth and innovation. Moreover, as talent becomes the biggest risk factor facing companies today, being able to generate more value from a smaller, nimbler workforce will become a winning business and risk-management strategy.
CEO’s, Boards, and Human Capital executives must tackle these problems head on and seize the catalytic growth opportunity that a brilliant talent strategy would present. They must formulate a technology-intensive talent strategy that maximizes the value created from smartly mining and deploying the company’s human capital assets. They must use technology to their companies’ long term competitive advantage.
Adopting such strategies is key to transforming companies into powerful, continuous value-generating, risk-resilient, digital economy leaders.