When the human resources
department is truly support-
ing the enterprise instead of
just filing and smiling, it
becomes the host of human
capital.
END-TO-END HUMAN CAPITAL VALUE REPORTS 149
modity without which nothing happens. I deliberately use
the word lead to emphasize that human capital manage-
ment is not the sole responsi-
bility of the human resources
department. It is everyone’s
job from top to bottom in the
organization. Human capital
investment is optimized only
when all parties from the
board of directors to first-line
supervisors and the employees themselves play a role.
Staff departments such as information services, finance,
or human resources presumably develop systems, design
processes, and offer services aimed at supporting corporate
goals. It would be absurd and wasteful for them to do other-
wise. However, in all my years in and around staff groups, I
have often found it difficult to locate the connections. Most
often, it is a case of a general enterprise goal and a general
staff response devoid of direct, verifiable, point-to-point
links. This is okay if you want average returns on your staff
investments. That is what probability theory predicts—
general response and average results. In our case, we are
building direct, visible links all the way up and down the
pathway from the enterprise level to the human resources–
led response and back up again. With direct links, it is possi-
ble to assess results in explicit terms and thereby make
improvements that yield above-average results.
Three Ex am ple s
Let’s look at three examples of specific pathways between
enterprise goals and human capital management. The cases
I’ve chosen are important issues for any commercial en-
deavor. They are also points on which government and edu-
150 THE ROI OF HUMAN CAPITAL
cation should focus. Moving more quickly, serving the
constituents, and operating in a more flexible and humane
way internally would be a great improvement for many pub-
lic institutions. The three key issues are:
1. Time to market
2. Customer service
3. Great place to work
Each has a different focus: time, service, or employee re-
tention. They represent the basics that give us a number of
different angles from which to understand the multitudes
of connections along the pathway. Figures 5-2, 5-3, and 5-4
display the pathways of the three cases that follow. They
reveal only a small number of the many connections be-
tween human capital management outputs and various
functional units. They show a mix of activities and possible
measurable outcomes. Space (and mental exhaustion) pre-
cludes showing all the possibilities of all three cases. It
would be overkill, and soon you reach the point of diminish-
ing returns. By applying your experience with each of the
line and staff functions listed, you will be able to think of
many more relationships. But a few excellent connections
are better than numerous mediocre connections. Of course,
the outputs from the functional units relate to and support
the specific enterprise imperative.
Figure 5-2. Sample human capital-to-enterprise pathway for time to market.
ENTERPRISE GOAL
Improve (Shorten) Time to Market
Research &
Development
Administrative
Support
Customer
Service
Sales &
Marketing
Production &
Distribution
FUNCTIONAL ACTIONS AND OBJECTIVES
Automate test processes
to shorten prototype
time to production
Improve equipment
uptime
Get accurate market data Anticipate customer
needs by surveying
Finance: have
funds available
Team with engineering to
shorten redesigns
Reengineer processes
to reduce rework
Refer customer
preferences to Sales
R&D/Production
Shorten process
cycle times to
speed operations
HUMAN CAPITAL MANAGEMENT ACTIONS AND OBJECTIVES
Support
Shorten hiring
time to start
Acquisition
Retention
Development
Shorten process cycle time
for pay and benefits
Shorten response
time on training
Involve employees in
“time” goal solutions
Bring customers in to
work with R&D
Hire business intelligence
Figure 5-3. Sample human capital-to-enterprise pathway for world-class customer service.
ENTERPRISE GOAL
World-Class Customer Service
Research &
Development
Administrative
Support
Customer
Service
Sales &
Marketing
Production &
Distribution
FUNCTIONAL ACTIONS AND OBJECTIVES
Go out to meet with
customers on site
On-time delivery Listen, guide, suggest,
and sometimes hand-
deliver in emergencies
Be available Zero defects
in billing
Design in customer
preferences
Achieve Six Sigma quality
Solve problems on
first call
Quick fix and
adjustment of
problems
HUMAN CAPITAL MANAGEMENT ACTIONS AND OBJECTIVES
Support
Hire service-oriented
people
Acquisition
Retention
Development
Develop incentives
for outstanding service
Build service culture
and processes
Nonmonetary
recognition
Be there at installation of
major products/programs
Partner to test ideas
Figure 5-4. Sample human capital-to-enterprise pathway for employer of choice.
ENTERPRISE GOAL
Become a Great Place to Work
Research &
Development
Administrative
Support
Customer
Service
Sales &
Marketing
Production &
Distribution
FUNCTIONAL ACTIONS AND OBJECTIVES
Offer continuing
technical education
Train supervisors to be
supportive and respectful
Provide continuing
sales and marketing
training
Supervisors on hand
for support with
difficult customers
Zero defects in
payroll
Stay on leading edge
of technology
Coach and develop
employees for career
growth
Offer flexible work
schedules
Give employees
right answer first
time
HUMAN CAPITAL MANAGEMENT ACTIONS AND OBJECTIVES
Support
Hire for “fit” to select
types who will succeed
Acquisition
Retention
Development
Survey market for
competitive benefits
Offer self-directed career
development software
Be available for
employee support

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