Belief #1: People are more than just cogs in the wheel

Many business leaders today agree that we need to put people first. Most chief executives trot out the tired adage ‘people are our most important asset’ on a fairly regular basis. But what does this really mean?

Most things I hear said and that read about HR still refer to people’s increased importance in reference to their role in implementing business strategy. Managers know that it is not enough to develop a great strategy, they need to be able to deliver it too. And they know that execution of these plans is increasingly difficult. So they need to engage their people. People are no longer just a resource to be used and expended, they need to be treated as a key asset; being developed and invested in.

I agree that people are central to effective implementation of strategy but I also think people, or at least talent, offer a much more significant opportunity than this. People can be central to the identification and development of strategy as well as its implementation.

The right people, managed in the right way, and supported by the right environment now offer any organisation the greatest opportunity for competitive advantage (or for organisations in the public sector, for transforming the type and level of services that are provided).

This is why the concept of human capital is useful. We should no longer see people as just resources or assets (human resources) but providers of human capital. And increasingly, an organisation’s success is determined by the amount of human capital it has available. Not just because human capital enables it to implement its business strategy, but because of the strategic ambition that human capital enables the organisation to have.

Think about the other sources of competitive advantage which were previously the most important: financial capital and customer capital. When these were each most important, businesses didn’t just think about using them to implement existing business strategies. They have been used to develop new business strategies supported by activities that would have been impossible without them. So why do we think about human capital / people management simply as something that will ease implementation of existing business strategies?

I think we need to be thinking about the extra capability or engagement we could develop in our people, and the additional business benefits this would provide. People management shouldn't just support existing business objectives, it can also provide the basis for setting more stretching or different business goals.