1. Why are people more important to organizations today than they were in the past?
Having a motivated and mobilized workforce has always been important, but in today's global marketplace, having a workforce that is a competitive advantage is more critical than ever. The reality is that competition can come from anyone, anytime, anywhere. Best practice process management is now a commodity, and product advantages are short-term, so the only real sustainable advantage left is people. When considering that demographic trends will make the competition for people even more intense in coming years, it should be no surprise that human capital will be the most critical asset that organizations need to maximize going forward.
2. Why do many organizations under-utilize their human capital?
Too many companies still consider people a commodity, and others don't have the know-how, interest, or commitment to taking the actions necessary to make Human Capital Management a centerpiece of its organizational strategy. Additionally, many CEOs come from functions that are more concerned about products or profits, and since human capital programs are often difficult to measure, some managers see them as "nice-to's" rather than "need-to's."
3. What inspired you to write your book, Human Capital Management: Leveraging Your Workforce for a Competitive Advantage?
Human Capital Management is a much misunderstood and under-appreciated subject. I felt it was time to take the concept mainstream and recognize it for what it really is, an organizational practice that utilizes people as a tangible asset. Human capital is as much an organizational asset as buildings, manufacturing equipment, or cash. Recognizing this, I felt compelled to share my understanding of this topic and provide a roadmap for leaders who are committed to transforming their people into a competitive advantage.
4. What is the difference between a Human Capital Management consultant and an HR consultant?
HR consultants typically have an expertise in a particular aspect of HR, like compensation or organizational development. They may focus on bringing a specific training program into a company.
In Human Capital Management, the consultant's focus is in examining how the client organization can utilize its people more effectively with particular attention on the return-on-investment of the company's people investment. The consultant then guides senior management and/or HR to identify and build a plan to maximize the utilization of the workforce.
5. How did you personally become interested in Human Capital Management?
Over the course of my career, and especially in the last 20 years, I learned that there are certain organizational components that when utilized together, produce tremendous results in mobilizing the workforce to achieve great things. My curiosity on the subject began many years ago when I discovered an employee survey that was targeted at the effectiveness of an organization's human capital rather than how satisfied employees were. This is when the light bulb went on for me, and ever since, I've concentrated my efforts on building organizational systems that maximize the use of people as a competitive differentiator.
6. Could you give us an example or two of an organization that would benefit from a transformation to Human Capital Management?
Many organizations don't perform to the expectations of management or their shareholders for a variety of reasons, and many of them are people-related. Maybe a company hasn't been able to develop a strong performance culture, or the development of a customer-focused environment hasn't been created. Other companies may take such a strong performance approach that they burn people out and have high people attrition. I've also seen good companies who had a solid base of people and good management, but they've underperformed as a total organization because they didn't know how to combine all the elements of a Human Capital Management System together. When companies are able to transform to Human Capital Management, ultimately they will see it in their bottom line results.