Have you noticed that everyone talks about leadership now, almost demonising the word manager? We have shifted our focus from people as a resource that need to be mananged, to people being an essential part of delivering results. As we operate in a world where machine and Aritificial Intelligence can do much of the repetitive and mundane jobs, the value of what makes us human increases. Leaders focus on what it is to be human, the motivators, purpose and inspiration and people experience. We now understand more about our complex brains, what motivates people, how we work, and why we choose to "follow" leaders and why we perform better in an environment of psychological safety. As we know more, it informs the way we lead and organise the work we do.
Where previously organisations were targets focused, serving the shareholders and operating in top down, hierarchal structures, over the past decade, a shift has happened. The kind of work we do has changed. Where once humans were mainly employed for their physical abilities, the lifting, carrying, making and farming and manufacturing, technology has taken over. Now humans are more commonly employed for their human skills. Nurses, customer services, problem solving, research, HR, innovation, vision - all require the heart, mind and body. To make all three work, leaders must tap into the people and customer experience world.
Human capital as a strategic priority
Human capital, people experience, human centred organisational design - call it what you will is only going to become more important in the future. Gone are the days when human resources was a function of process and policy, mananged by a separate function or simply added onto someones existing job. Payroll, recruitment, holiday and sickness management, capability management and systems managers are still required of course. Yet, now the HUMAN resources function sits at the top table, integral to the future success of the organisation. With expertise in Performance Management, Learning and Development, Rewards and Benefits, Wellbeing, Diversity and Inclusion, Talent Management, Cultural Specialists, Organisational Designers.
There is no excuse to ignore the HUMAN factor in business performance. Since human capital increases over time, as knowledge, experience and skills increase, any leadership team should be looking at how they are investing in their people and the enviroments in which they operate in to maximise potential performance. In her work, Liz Wiseman found that on average, managers tap into just 66% of human capital. She argues that leaders can either diminish capability or multiply it. Google initiate Project Aristotle, to identify why some teams created higher performance than others. They found that the enviroment (psychological safety) was a fundemental diffentiator. When people feel safe, and have the tools, resources and freedom (within safe boundaries and norms), they increase capability.
Factors that determine human capital
- Skills and qualifications
- Education levels
- Work experience
- Social skills – communication
- Emotional intelligence
- Personality – hard working, harmonious in an office
- Habits and personality traits
- Creativity. Ability to innovate new working practices/products.
- Fame and brand image of an individual. e.g. celebrities paid to endorse a product.
- Geography – Social peer pressure of local environment can affect expectations and attitudes.
The 2020 pandemic has forced organisations to hit the reset button and reinvent the way they work. Previously held beliefs on how people perform have been shook up. There has been a focus on health and welfare. Leaders have had to focus on the basic needs of their people and the fundamentals of what they deliver and how. It's as though we have been sent a clear message about what is really important in life. Key workers have become our heroes and we have relied on communities, friends, and neighbours to keep us safe.
We now appreciate the value of people. We have all taken stock and remembered that family, health, home, and communities are essential for our sense of wellbeing. Human relationships, community and culture have been forced into our consciousness and no longer will people accept putting their work above other important aspects in their lives. We have tapped into our creativity, innovation and revisited our hobbies and passions. We are changed.
These learnings need to be captured and used to enhance human performance, productivity, and the way we work. Leaders acted fast, built momentum, and pivoted the way they work. Pandoras box has been opened and those that capitalise on this a strategic priority will thrive in the future. In the old world, moving to remote working would have taken months, years even, to discuss, design, get sign off and onboard everyone. In a crisis, it took weeks. Yes, it was stressful, chaotic at times, but proves that when something is a priority, when all eyes focus on one strategic goal, anything is possible.
In this course you will learn how to maintain this momentum and make decisions consciously, so your organisation doesn't just survive, but it thrives.
Human Capital is a measure of the skills, education, capacity and attributes of labour which influence their productive capacity and earning potential. In 1964, Nobel Prize winners and University of Chicago economists Gary Becker and Theodore Schultz created the theory of human capital. Becker found that the investment in workers was no different than investing in tangible assets and capital equipment. Both physical capital and human capital both generate income and other outputs.
Though he only studied white men, Becker's research focused on education. He found that 25% of the rise inUS income per capita from 1929 to 1982 was due to increases in schooling. He considered the cost of education being time as well as money. As humans become more skilled, educated and experienced, performance increases. Before Becker's work, economists treated all labour (human capital) units as the same.
- Books and articles
How Google found the key to unlocking team performance
Liz Wiseman how the best leaders make everyone smarter