There are two primary sources of competitive advantage – organisational effectiveness and efficiency. Organisational effectiveness is a measure of how well you find and retain customers and ultimately revenues. And your workforce’s ability to generate a healthy profit for the time invested in them is a measure of business efficiency. Doing good business is about managing both functions well and in balance
Business models have undergone lots of evolution. In the 80s, brick-and-mortar models were in play. In 2000, we started to see widespread proliferation of Web technologies and the exploration of what technology could do with technical disciplines steering these embryonic development phases. And today’s business users are starting to take hold of the steering wheel again this time, armed with a much better appreciation of the capabilities and limitations of Web-centric technologies.
Business models are useful for describing and classifying businesses, as well as directing business. In 1970s, business models came from McDonald’s Restaurants and Toyota. In the 1980s, model innovators were Wall-Mart and Hypermarkets. The 1990s saw new business models from FedEx and Toys R Us; the 21st century saw models starting to harness Internet technologies with Blockbuster, Home Depot, Intel, and Dell Computer paving the way; and in more recent times with established technological and Web-centric business models companies like Netflix, eBay, Amazon.com, and Starbucks are leading the way
Human capital is the value employees provide through their application of skill, know-how, and expertise. To measure this is difficult. And because people are a component of practically every department and are everywhere, the HR function is all too often composed of only a handful of individuals that can become thinly spread by virtue of the depth and breadth of coverage needed.
It should come as no surprise that the HR function has traditionally been seen as a largely administrative and transactional one. We can help move it towards being a much more strategic one driving better value and returns from your greatest asset – your people.
Human capital is different from tangible monetary capital that show relatively higher growth rates in times of prosperity, but, in periods of recession or depression, monetary capital growth declines rapidly. In contrast, human capital grows cumulatively with time cultivated through experience and education. Human capital offers much greater cumulative growth as best practices develop and the quality of succeeding manpower is greater than that found in preceding ones. And there is a growing body of research revealing just how much value human capital brings when focus on it is “business as usual.”
Recognizing top talent is quite possibly the most valuable source of competitive leverage available, but something that more often than not is overlooked. Recognizing top talent means marrying up personal goals and aspirations with what the company is able to offer. Employer’s need a good systemic vision, establish metrics for recognizing high-potential individuals, and navigate relationships towards a mutually viable “win-win” model. And to do this means adopting a company-wide vision and exploring employee capabilities and vulnerabilities more holistically by looking closely at what motivates and corrodes employee engagement.