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
The last post focused on Shared Core Values as a mark of high-performing companies. The rapidly shifting external environment and the expectations for more socially conscious work settings strongly suggest companies with a set of core values should re-examine and possibly update them to be relevant and current in addressing these concerns. For those companies without a well-defined set of values, it’s time to “get on the stick” and create a set of Shared Core Values to align and engage employees for mutual benefit.
This alignment is necessary to continue building the Virtuous Cycle of Performance. Your employees bring their KASH (Knowledge, Abilities, Skills, and Habits) to work each day. They continue to bring their KASH IF they walked out the door yesterday with more KASH than what they started with AND they perceive their investments of time and energy are worth their efforts.
The next levels of Human Capital, Knowledge and Intellectual Capital, stem from the continual investment of individual KASH within an enterprise. Knowledge Capital resides within each person, based on what they know from experience and learning. Intellectual Capital is generated each day as people apply their Knowledge Capital to seek solutions for new challenges. Solutions become part of Organizational Learning, which strengthens and reinforces collective Intellectual Capital through an enterprise, which leads to greater efficiency and effectiveness as things that don’t work are quickly discarded for those that do.
The proper combination of efficiency, which involves aligning actions to achieve desired results with the lowest expense of energy, and effectiveness, which achieves the highest results at the lowest overall cost, leads to greater productivity, which results in profit. Efficiency results from the consistent and proper application of Knowledge Capital that creates Intellectual Capital in proprietary solutions that set a company apart from competitors. Yet, it is the combination of and synergy between Knowledge and Intellectual Capital that leads to productivity and Relationship Capital, which is the next level of applied Human Capital.
Internal and external relationships, i.e., those between employees and those with external parties such as customers, clients, and vendors, respectively, are the fuel that drive a company’s success. Without relationships there are no sales; without sales, revenue does not exist. The foundation of lasting relationships are the CORE VALUES of trust and care. The image to the right shows how Human Capital aligns in high-performing companies.
It TRUST and CARE are not embedded throughout organizational practices and are not recognized and rewarded accordingly, INTERNAL customers will stop investing their KASH and look for employment elsewhere. If external relationships are not valued and customers lose trust in a company’s ability to fulfill commitments, EXTERNAL customers will fail to return. A company’s success depends first and foremost on the alignment of HUMAN CAPITAL in all its forms. Alignment is not just on Shared Core Values; alignment on Organizational Purpose is also critical, which I’ll address in the next blog.
Questions for the Week: How is Human Capital aligned in my company to obtain desired results? How do we recognize and reward the application of Human Capital in our company? What do we value more – financial capital or human capital? What might need to change to realign our company for better results and outcomes?