Archive for the 'Team Building' topic

Human resource development and management does not develop human capital precisely to produce valuable results and increase in worth

There is a lot of talk and writing about human capital, intellectual capital, knowledge management, and other means to improve the capabilities, productivity, and output of human capital. Despite the talk and writing, companies have never been able to integrate business process capability requirements, human capital capability development, qualified human capability deployment, human performance and cost, the value created by human performance, the value-added by human capabilities, and the worth of specific human capital.

Many companies proclaim that their people are their most important asset. But most of the companies manage human resources as employees, rather than managing human capital as assets. Many common human resource structures actually stifle human capital with contrived organizations and positions, position or job descriptions, salary scales, and career plans.

We can manage human capital effectively by managing the utilization of all capital in business performance to produce business results

The fundamental problem of 20^th century enterprise management used today is the failure to manage the business. The enterprise is managed through organization, planning, accounting, human resource management, performance management, and other structures laid over the business. The actual business is defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Investments in capital include human capital solutions in the personnel utilized, human capabilities developed, and human knowledge support developed.

All human capital solutions are utilized in business performance to produce specific business results. [more...].

Human capital is administered as human resources and their worth in the value added to the business is unknown

In most enterprises, human resources are administered as employees and are assigned to positions in organization units. There is no way to measure the value they produce, evaluate performance costs against the value created, assess their worth as human capital, or to develop them to increase their worth and provide measured increased value to the enterprise. Administered employees do not have a defined stake in the enterprise.

The economic crisis shows that banks and other corporations do not plan, manage, and account for human worth in the value-added to the corporate business, giving rise to perceived unmanaged executive compensation and staff rewards. The only way to eliminate the problems that caused the economic crisis is to manage the business and to manage human capital as part of the business.

20^th century human resource management methods prevent good human capital management

There is a lot of talk about human capital, intellectual capital, knowledge management and other means to improve the capabilities, productivity, and output of human capital. But, each item is treated separately. We try to manage human performance, but have no framework to understand real human performance related to measured value to the business. We try to develop human capabilities, but have no framework to relate human capabilities to specific business needs. We have no way to integrate human capital performance with the value created and the worth of human capital.

We must manage the business to manage the worth of capital in development costs and the future value added to results produced

Before we can manage human capital properly, we must organize the business for 21^st century management. The business is “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. We must identify and organizes the results needed for business success, the human and other capital solutions needed to produce results, and performance in the utilization of each solution to produce each result. We must manage the development and utilization of specific human capital solutions to produce measured result value, to increase capital worth, and justify increased performance costs.

We must improve human performance by managing the results humans produce

The key to making human capital a high-worth asset is to manage the results our enterprise produces related to human and other capital utilized. [more...].

Governments around the world are promising programs to prevent future business management problems

After every economic, financial, or corporate governance crisis, governments promise action to prevent problems from happening again. The actions invariably impose more regulations on enterprises, which increase business costs and complexity, and do not address or solve the actual problems.

There is only one problem to solve, the problem of obsolete 20^th century enterprise management

The fundamental problem underlying every economic, financial, and corporate governance crisis is the failure to understand and manage the business properly on the part of managers, accountants and auditors, and government regulators. The problems are inherent in 20^th century management structures laid over businesses worldwide that prevent actual business management.

There is only one solution, organize the actual business with R-pM and apply 21^st Century Management Standards

The solution to the problem is available today with Result-performance Management (R-pM) to assist businesses, professional bodies, educational institutions, business service and solution providers, and government programs to institute and support proper business management. R-pM replaces 20^th century management structures laid over the business, with one business structure for 21^st Century Management.

A government “Business Management Program” will prevent future problems and provide significant economic benefits

The financial crisis proves that serious enterprise management problems exist. Now is the time to open our minds to new actual business management and to avoid repeating past mistakes. Most governments likely will continue the past cosmetic approach to pass new regulations and announce that they have solved the problem. A forward-looking government must take the lead to institute a “Business Management Program” as discussed in the referenced article. Once one government establishes its country as the leader and begins the program, other countries will be forced to follow. But, the lead country will always have the advantages developed by the leader.

A proposed government Business Management Program is outlined in an article in 21^st Century Management Magazine

The essential components of a Business Management Program are described in the article “Government Business Management Program to prevent future Crises and boost Competitiveness” in 21^st Century Management Magazine at R-pM.net. .

20^th century management administers the human resource function

Today’s 20^th century management generally administers human resources as employees. Human capital management is talked about, but is not truly understood and is rarely put into practice. Since the business is not managed, human capital can not be managed as a part of the business. Humans tend to be assigned to a responsibility center to be managed by a specific manager, with human utilization and development depending on the outlook of the manager.

Human and knowledge development tend to be directed at the general needs of the enterprise, rather than the specific needs of the business. Humans are not developed and utilized as enterprise capital to create the highest value and to increase human capital worth.

R-pM manages human capital worth to produce result value-added for 21^st Century Management

Result-performance Management (R-pM) organizes the business for 21^st Century Management. R-pM follows 21st Century Management conventions, definitions, and standards to enable business collaboration and integration, common solutions and outsourcing, and an environment for human capital development that can be applied to any business. R-pM includes fundamental principles to improve the worth of human capital and the value-added to business results:

• Enterprise capital is organized by the human capabilities required to manage, develop, and support the capital
• Enterprise result sets are organized to utilize a common set of performance solutions, particularly human capability and outlook
• Human capital is organized as one category to be managed by those with human management and development capabilities
• Human personnel is readiness capital to maintain human capital ready to produce a set of results under a result management responsibility
• Human capability is production capital to define the capabilities needed by the business process for difficult high-value results to acquire or develop specific capabilities needed by the business
• Human knowledge is information capital to create and manage the knowledge to develop capabilities, and to utilize specific performance solutions to produce specific results
• Human capital worth is increased by additional capabilities developed and knowledge established through knowledge creation to produce results
• Human capital worth is assessed against the known result value-added produced and other factors to ensure that human remuneration is in line with the value created in the business

Human capital is the most difficult to acquire, develop, and manage in any business. R-pM places human capital where they have the interest, outlook, and capability to produce specific results and develops capabilities where humans have the interest, innate foundation, and prior experience.< [more...].

Most of us think of human capital as human resources or the people that are employed in the business. This is one part of human capital. Human capital includes people as human personnel capital.

Human capital also includes the capital that improves innate human performance. This capital includes human capabilities as a separate set that can be developed and managed to produce results. This capital also included human knowledge as a separate set that can be created and delivered to assist humans utilize other performance solutions and produce higher-value results. Human capital is logically defined as “the personnel, capability, and knowledge capital that is mobilized through performance solutions to execute enterprise operations and produce results”.

Logically all capital must be defined as performance solutions to be deployed and utilized to produce a specific result. The post on August 6, 2007, The Logic of Capital Management, provides the background.

Capital utilized by the business is organized into four categories

Capital utilized by the business requires different professional capabilities to be professionally managed, which organizes four categories of capital:

• Business organization, process, and data capital to manage capital that directly produces a result and cannot, generally, produce another result. [more...]