With disruptions coming fast and furious, stakes for today’s C-suites are high and their search for the “right bench” urgent as they navigate change and seek growth in turbulent contexts. But plans to up-level organizational talent often deteriorate into conversations about capability gaps, outsourcing or playing musical chairs. New studies reveal drastic leadership fault lines in the classic approach to talent and offer insights into adopting new people strategies to unlock future growth. No matter your industry, development of human capital must become a top priority.
Wharton has described human capital as the “combination of intangible things that make employees valuable, like experience, education, industry knowledge, and even loyalty.” Such inner resources can span self-awareness, inventiveness, judgment and optimism. When nurtured, this full inventory can create organizational resilience — the ability to grow collectively through relentless change.
Companies’ Ultimate Assets are Flesh and Blood
Research from Korn Ferry aligns with insights from our 2020 article on “Reimagining Marketing for the 21st Century.” We identified people’s adaptability and perspectives as future success drivers, arguing no artificial intelligence will ever manage the complexity of a business’s evolving needs better than fellow, empathetic humans. Korn Ferry valued Human Capital at $1,215 trillion globally, compared to just $521 trillion for physical capital, including technology.
Tellingly, 63 percent of CEOs told Korn Ferry they believe technology will create greater value than people, and 64 percent see employees as “a bottom-line cost” vs. “a top-line value generator.” We can’t be surprised when such leaders pursue growth by investing in priorities other than human capital — even though technology and reorganizations can’t create new revenue streams or align brands with unspoken consumer desires.
Given that human capital development remains a lower priority, we also shouldn’t be surprised that employees are quitting in record numbers. The “Great Resignation” may have been provoked by COVID-19. But it’s motivated by employees feeling overlooked and undervalued, believing that their work doesn’t matter and lacking any sense of belonging.
Bluedog surveyed U.S. employees across industries to explore why they leave and how they define ideal leadership. The results reveal people eager to maximize their value as part of something bigger. 66 percent want “meaningful stretch opportunities.” 69 percent want a manager who both “helps [them] feel like [they] belong” and communicates how their role “contributes to the organization’s vision and strategic direction.”
Pivoting from Talent Management to Human Capital Development
Businesses are accustomed to “people strategies” that are purely pragmatic: compensation, task-based training, traditional performance evaluation, etc. But we see EQ, creativity, curiosity, networking effectiveness and “belonging” as vital to the future of work. It’s why we champion marketing departments filled with high-EQ people experts, who collaborate as well as they know consumers. When businesses nurture such critical, adaptive thinking across functions, they generate ever-renewing organizational capability.
Leaders too must transition beyond strategies to which they’re accustomed: managing and controlling people vs. developing and unleashing them. As twenty-first-century businesses evolve, managers must shift their focus from quality control (line manager orientation) to that of a talent sensor and puzzle-solver, intent on connecting employees to resources, real-time feedback, stretch opportunities and support.
To optimize employees’ impact and satisfaction, human capital development demands knowing their roles, capabilities, EQ, passions and resilience. It’s no “click-here” task. But it delivers a high return on investment, unlocking value across dimensions like speed of learning, ability to make connections/build networks and navigate increasing complexity, decisiveness, and the competence to develop others. It yields whole teams operating at the height of distinctly human powers.
The Path Forward: a Human Capital “5 Action” Framework
For businesses ready to commit to human capital development, this “5 Action” framework serves as a guide for getting started.
The benefits of human capital development can be profound. By deepening relationships across levels and redesigning teams, leaders enrich their bench and its collective potential, following the maxim of renowned basketball coach Phil Jackson: “The strength of the team is each individual member. The strength of each member is the team.” By promoting talent accelerators, leaders ensure that those who draw the best from others know they belong. Redefining employee programs as care results in a better experience — a key differentiator for post-pandemic workers.
By taking these considered actions, businesses can cultivate their people’s uniqueness, eagerness to self-develop, and desire to belong in a true success story to advance and future-proof organizational growth. Humans, after all, will never become obsolete. What’s endangered are businesses and leaders who look past their potential-laden teams rather than embracing the complexity of developing them.
Eriko Clevenger Pope WG99 (CEO, Katalyst STL) has held senior marketing positions for 20 years, most recently as Head of Global Marketing for Nestlé Purina PetCare, and now guides nonprofits and entrepreneurs to unlock growth. Michelle Hayward is CEO of Bluedog Design, a growth consultancy and Certified B Corp that advises and guides complex organizations in making branding, marketing and business decisions that matter.