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The New Human Capital Strategy: Improving The Value Of Your Most Important Investment-Year After Year
Introduction: A Systematic Approach to Growing
your Human Capital , 1-13
Part 1 Designing the Blueprint , 17-101
Part 2 Building the System , 105-236
Business success largely depends on people who outperform their peers at competitor organizations. But if people are an organization’s most important asset, shouldn’t companies know if their people are ‘better’ than their competitor peers and whether they continue to improve year over year? This is knowable. Consider the discipline with which companies measre, manage, and grow financial capital. Now think of how they manage human capital. The ‘most important asset’ is largerly unmanaged.
In the 1950s, manufacturing excellence was the key to economic growth. W Edwards Deming created a system for increasing manufacturing productivity that dramatically improved the global competitiveness & standard of living in Japan. In subsequent years, Deming’s work was adopted by manufacturing organization across the world.
Today, services revenue accounts for 80% of GDP in advanced countries, but there are few disciplined systems for improving the productivity of people in service and knowledge intensive jobs. Many executives delegate this task to HR & hope for the best. But HR is organized in professional silos for program excellence, not for business results (e.g., who is accountable for year-over-year improvements in leadership performance?). Add more measures, new staff, strategic partner training and more ‘world class’ programs; it still won’t deliver customer & shareholder value. HR is not designed to deliver business results.
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