From Financial Capital to Human Capital


The new corporation differs from the old in both goals and basic assumptions. In the industrial era, when the strategic resource was capital, the goal of the corporation could only have been profits. In the information era, however, the strategic resource is information, knowledge, creativity. There is only one way a corporation can gain access to these valuable commodities—that is, through the people in whom these resources reside.

So the basic assumption of a re-invented company is that people—human capital—are its most important resource. What used to be one of the radicals’ favorite slogans, “People before Profits,” is finding its way into the boardroom and being transformed into a more businesslike but equally humanistic “People and Profits.”

In an information age society, human resources are any organization’s competitive edge.

One expression of the importance of human capital is the new corporate preoccupation with health and fitness. Corporations are treating their human assets with new concern, encouraging their people to stop smoking, lose weight, exercise, and learn to manage stress. What might have been considered an intrusion into one’s personal life in the past is fair game when people are a company’s strategic resource.

The new re-invernted corporations stress inordinate regard for the two most important types of people in an enterprise: employees and customers.

They have discovered that by being both pro-people and pro-profits, a company can earn more than it it had targeted profits as its only goal.

It is not a question of being nice to people. It is simply a recognition that human beings will make or break a company.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

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Leadership for Corporate Transformation


So how are boards performing as enablers and facilitators of corporate change? Many of them are most systematically assembling the building blocks. The board establishes the vision and wrings its hands as the gap between aspiration and achievement grows wider. The role of the board is the formulation and implementation of strategy. It puts its backs into the former, but when it comes to implementation it hands it over to management and hopes for the best.

 Top management commitment continues to be a major barrier to change. It is essential in view of the complex nature of the change task in many organizations, and the number of individuals and groups that must be involved.

 The widespread perception of a lack of commitment in the boardroom is understandable. How can they believe they are committed when they have not put in place all the actions that are necessary to make it happen?

 Many boards are abdicating their responsibility for leading the process of corporate transformation. Determining vision, mission and strategy appears to be perceived as ‘direction’ rather than as an aspect of ‘leadership’; while the term ‘leadership’ is applied to the ‘management’ process of motivating people to understand and achieve vision, mission and strategy, once these have been defined by the board.

 ‘Leadership’ appears to be seen by the chairmen of many boards as a management responsibility rather than a boardroom competence. It is not surprising that many management teams perceive a lack of commitment on the part of the boards of their companies.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight