By Dr. Ray Benedetto, DM, LFACHE, Colonel, USAF, MSC (Ret), Co-founder of GuideStar, Inc. and Co-author of It’s My Company Too! How Entangled Companies Move Beyond Employee Engagement for Remarkable Results
Management guru Peter Drucker (1909-2005) once said, “Every organization is perfectly aligned to achieve the results it gets.” Are you getting the financial results you desire or is your company falling short in meeting its goals? One reason may be your organizational design and its implementation.
Unless your company is on the bleeding edge of technology where fortune favors the bold along with funding from private equity, you most likely have a defined client base with desires to grow your business. If your company has existed for more than a few years, you have most likely built internal systems to collect and share data, manage operations, and deliver results. However, we live in a VUCA world – one where Volatility, Uncertainty, Complexity, and Ambiguity challenge one’s future of sustainability and success. Too many authors talk about being “agile and resilient” without discussing the roots through which these attributes are attained and sustained.
This article is the first in a series directed toward leaders of small to mid-size companies, particularly those members of the C-suite who are responsible for setting their organization’s direction. These articles share single objective: To help senior leaders view their companies from a design perspective, from which they can gain better results across the board, not merely with financial outcomes.
Results Stem from Capital Alignment
Balance sheets provide “empirical data” that result from human effort, but they fail to show how human capital within a company aligns to achieve those results. Personnel expenses are the largest portion of most corporate budgets, but accounting for the contribution of human capital is weak to non-existent except in the form of FTEs. Financial capital is often used as a key measure of success, but it is the lagging indicator of how human capital in all its forms align to achieve results. In a VUCA world, companies need to be flexible, adaptive, and forward-thinking, all of which rely on the quality of one’s human capital in responding to the external world.
Why Human Capital Comes First
Human capital is not merely having competent people in the right seats on the bus. Competence relates to the knowledge capital each person holds as well as the intellectual capital they employ to do their work, solve problems, and create new solutions to vexing challenges. Human capital also extends to customer service and the ability of each employee to build relationship capital with those they serve within and outside a company. Failing to develop and align these forms of capital can have deleterious effects on a company, usually in the form of high turnover and constant training to fill gaps created by unanticipated vacancies.
Coming Up: The next two articles will address aligning Human capital for long-term success.