The decade of human capital is upon us. Your company’s culture is the single greatest differentiator you have. Treat it that way.
The World Economic Forum states that talent, not financial capital, is the “key to innovation, competitiveness, and growth in the 21st century.” The Economist Intelligence unit found that more than anything, organizations need people management strategies. CEOs around the globe named human capital as their most critical challenge.
As HR expert Dave Ulrich says (and has been saying since 1998, by the way), the “soft stuff” like culture, emotional intelligence, and intellectual capital matters. In fact, we shouldn’t even call it “soft stuff” anymore. Traditional forms of competitiveness – pricing, distribution, product features – are assumed and can be copied. But, in our ever-shifting workplace, it’s the organizational capabilities – agility, human capital, and dare we say, culture, that distinguish the goods from the greats.
The way we work is changing. Gone are the days of the traditional 9-to-5 under a central office management structure. We’re entering a new era of work, and it’s rich with opportunities to drive growth – by cultivating talent, streamlining processes, and capitalizing on collective intelligence.
1. Cultivate diverse and dispersed talent.
83% of organizations believe they are losing the war for talent. In our increasingly globalized and freelance economy, talent is borderless. We need to expand our thinking of where and when work gets done and who does it. Currently, there are 53 million Americans – 34% of the US workforce – working as freelancers, and it’s predicted that by 2020, half of the talent required by organizations will not actually work for the organization. Companies are no longer only outsourcing roles like delivery drivers, custodians, and food service, but also software engineers, accountants, and graphic designers. Projects can be fragmented, with different people assigned to different aspects of it. These freelance workers get to pursue more meaningfully independent lives, and businesses get access to precise skills at the exact time they need them, even if the best candidate lives in another state or country.
Practical Tip: New categories of talent acquisition are emerging. Create a framework for how to recruit from such diverse talent pools, how to manage freelance or outsourced staff, how to engage contingent workers in the company culture, and how to divvy up the work as needed. Take the lead on providing direction, motivation, and reward, and driving results from an increasingly dispersed and diverse employee base.
2. Streamline processes for collaboration.
Workers can look at their phones 100 times a day and spend up to 40% of their days responding to emails. In 2014, 64% of the US population had a smartphone, up from just 18% in 2009. And in 2014 and 2015, US adults spent more time on the internet via their phones than on their laptops. Millennials are now the largest generation in the workforce, representing 35% of workers. In addition to having distinct expectations of their working life (innovative environments, rapid career progression, freedom of opinions, autonomy), they also work differently – 45% of them use smartphones for work purposes, compared to 18% of older generations. Technology is moving at rapid-fire pace, and if harnessed, can have a huge impact on your people management strategies by fostering collaboration. Financial outperformers are 57% more likely than underperformers to use collaborative and social networking tools to enable teams to work more effectively together.
Practical Tip: In this information age, many workers are always on the clock, doing mentally engaging work, with social media just a touch away. We see more sides of each other in today’s workplaces than ever before. In such a collaborative marketplace, innovation is more than a single person’s creative application of skills – it’s the sum of an organization’s capabilities, experiences, and knowledge. Innovation hinges on an organization’s ability to streamline processes and technology to adapt to the needs of a quickly-changing marketplace.
3. Capitalize on collective intelligence through engagement.
It’s not enough to just have top talent, you also have to engage them to drive top performance. Leaders are the caretakers of the largest investment of the company (60-70% of total costs), responsible for nurturing that investment and helping it grow. The collective intelligence of your people – intellectual property, brand, talent – accounts for the largest share of market valuation for publically traded companies. How you engage talent matters and can have huge impact for your bottom line. Companies with high employee engagement have 3.9 times the earnings per share of their competitors. It’s also important to note that the #1 motivator for employees to go the extra mile at work is not money or benefits, but camaraderie with other people.
Practical Tip: Move from simply saying “our people are our greatest asset” to being able to describe the value that asset brings in a way that helps investment decisions. Find new ways to connect people to each other and to information, both internally and externally, through your organizational culture. And ultimately, remember that when we talk about talent management, it’s your employees’ talent, not yours, and they are loaning it to your company. So, how will you engage your talent?
Marketing, operations, financials – these are table stakes for today’s business leaders. More than ever, leaders are evaluated on their ability to manage organizational challenges like talent, agility, and culture. No matter what business you’re in, you’re always in the people business.