Three Elements Of Human Capital

The challenge for individuals and organizations is to get an ideal mix of the three elements of human capital. The challenge of competing on human capital is the challenge of managing this interactive cycle of building and leveraging intellectual capital, social capital, and emotional capital. This is just as true for individuals as it is for organizations.

a)At the individual level successful careers increasingly require the ability to continuously protect and enhance one’s own human capital through continuous learning, through building relationships and by developing one’s emotional ability to take risks, to make commitments and to act.

b)At the level of a company success will increasingly depend on the ability to attract, develop, and

The key to a successful human capital strategy is process efficiencies, effective use of information technology, and business metrics.

Human Capital Strategy Defined in the following

iii) The underlying principles of effective human capital management:

i). Insist on SYSTEMS thinking

Business models and human capital strategies must match. Decisions about each one are intertwined and are certain to fail if they are addressed independently. Furthermore they must be in accord with the marketplace: The customer and the competitive and regulatory spheres in which your company lives. Therefore begin by thinking of your organization as a system.

ii) Get the right FACTS

Go beyond external sources and internal perceptions and tap into the running record of your company — its performance trends and human capital patterns — to get firm-specific insights. Take advantage of the records of actual events maintained in your human resources information system to discern how your business and human capital strategies have been working for or against each other. The facts are there to use.

iii) Focus on the

Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself.

That’s an awful lot of big words that really don’t provide a lot of actionable information, especially if one is trying to understand how to use people to create sustainable competitive advantage.

Eric Brown gives the following definition and example to explain the same in a very effective way. He says: In order to gain competitive advantage, we must do something different than our competitors in such a way as to make it difficult (hopefully impossible) to imitate.

He also gives the following example….may be its not the best but it definitely helped the audience get a good grasp of how to use their human capital to create sustainable competitive advantage.

Suppose one is the owner of an American football team and trying to find a way to ensure that his team wins. What does he