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Innovation in Human Capital Management

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In my existential search for meaning in HR, I’ve tried for a very long time to understand what HR could really do for the business.  Certainly talent and our ability to contribute to directing talent’s growth through talent management is very important to our organization’s viability and competitiveness for the future.  But this doesn’t change the way we look at human capital.  In fact, to most of us, human capital are simply producers.  Yes, we are increasingly a service society, but our view of human capital has not substantially changed.  For HR to be viable in the future, we need to rearrange our understanding of what human capital is and what their contributions are.  Without this fundamental change, we cannot successfully change our approach to HR strategy.

As I stated before, the new value of human capital is innovation.  The days that workers brought skills, labor, know-how to their jobs is over.  Today, we call ourselves a knowledge economy.  But we’re so far past looking for simple knowledge that if we treat knowledge and intellectual capital as our most important assets, we’re screwed.  Innovation capital is so much more.  Beyond simple knowledge, it’s our employee’s ability to analyze, problem solve, and innovate.  It’s the ability to be constantly creative and bring new ideas to the table consistently.  It’s the ability to collaborate as a complete organism to develop and retrieve the best ideas out of the organization.

Innovation and new knowledge generation is not new, we just don’t think about it in HR.  We’re so involved with our HR workforce planning and our talent management, we’ve missed out on the fact that all this talent operates within an organization.  It’s not the organizational culture that makes success.  Neither is it talent that makes success.  The interplay between culture and talent to create an environment is what will breed success.  I’m not saying that we get away from talent management, HR metrics, and workforce planning.  These are all good and necessary pillars that will hold up true and ongoing innovation.

But why can’t we just stick with talent management?  Because talent management does only addresses a small part of the core business need of the organizations we work for.  In today’s knowledge economy, what matter is the creation of ideas.  While necessary, talent simply allows us to fill orders (perhaps very well) and increase performance capacity.  It does not modify the way people “think” and connect ideas.  The only way this is done is through careful and cultural attention to how we create ideas, and ideas are not created individually.

I’m not saying that innovation is an important output of or employees.  I am also obviously not saying that innovation is the sole domain of the operations and production side of the business.  I’m specifically saying that innovation is the single most important value element that our employees produce.  Employees bring talent.  Therefore we must manage the talent of our employees.  But the output of talent is innovation.   Therefore we must manage of talent must be directed to the production of innovation.

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12 responses to “Innovation in Human Capital Management”

  1. Innovation in Human Capital Management But this doesn’t change the way we look at human capital. In fact, to most of us, human capital are simply producers. Yes, we are increasingly a service society, but our view of human capital has not substantially changed. For HR to be … [

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  3. systematicHR – Human Resources Strategy and Technology » Innovation in Human Capital Management

  4. Roger KLeppe Avatar
    Roger KLeppe

    The last sentence needs clarification:

    “Therefore we must manage of talent must be directed to the production of innovation.”

    Great blog post.

    **Note from Dubs: Roger, I read that a couple days ago and I would correct it if I had any idea what I was talking about when it was written. Oh well… 🙂 Thanks.

  5. Frank Avatar

    Dubs,

    Maybe it’s just a personal bias and not representative of reality but I have to agree with you that the product of talent has to shift to innovation.

    My belief is that if you are not moving forward then you are not just standing still. You are going backwards, because everyone else is moving forward.

    Do the same old same ad infinitum and you have a perfect recipe for failure. Sure, we have to get the job done but simulataneously to find a way to do it better.

    And we have to do this all the time.

    Frank

  6. systematicHR Avatar

    Thanks Frank. I guess the underlying idea is that we need talent for something. In a world where China and India can do everything from engineering to manufacturing cheaper, talent in the U.S. is paid to think innovatively. HR needs to think about the strategic end game, not about the tactics that get us nowhere.

  7. Mary Adams Avatar

    I agree with you wholeheartedly. We have all made a mistake of separating our views of people, knowledge and value creation in corporations. It is only when we view it as a system that we can begin to manage our knowledge-based businesses proactively. I would, however, like to point out that the field of intellectual capital does just that–it helps us understand the integrated system that includes not just knowledge, but also people, relationships, processes and reputation.

  8. […] Innovation in Human Capital Management […]

  9. Anita Avatar
    Anita

    “Innovation and new knowledge generation is not new, we just don’t think about it in HR.”

    Truer words have never been stated.

  10. […] Innovation in Human Capital Management The other great mind in HR is Wes Wu. Here, he begins to wrestle with the fact that Talent Management only addresses a small part of the people needs of the organization. In particular, Benchmarks in Performance Measurement is worth a gander. […]

  11. […] Innovation in Human Capital Management The other great mind in HR is Wes Wu. Here, he begins to wrestle with the fact that Talent Management only addresses a small part of the people needs of the organization. In particular, Benchmarks in Performance Measurement is worth a gander. […]

  12. […] Innovation in Human Capital Management The other great mind in HR is Wes Wu. Here, he begins to wrestle with the fact that Talent Management only addresses a small part of the people needs of the organization. In particular, Benchmarks in Performance Measurement is worth a gander. […]