Human Capital Value TM

"Your business is your people no matter what you do!"

by Mahboob Momen 2007

Let's face it - business is a battle of business development, innovation, survival, growth! 

The life blood of every business is to seek competitive advantage! Where is the next competitive advantage going to come from? This is the question most business owners/board directors are asking all the time! 

We think we have the answer... It's been staring us in the face!  1st, what cycles of competitive advantage have we been through already? They r the following; I can produce a better product - than you can! (Product Advantage), I can produce a better product at a cheaper cost - than you can! (Cost Advantage) I can produce a better product, more efficiently - than you can! (Efficiency Advantage) I can provide world-class service - better than you can! (Service Advantage) I can provide customer relationship management - better than you! (Relationship Advantage) I can provide customer experience management - better than you can! (Experience Advantage)

Every business, no matter what market sector, solution or service offering, has gone through one or more of these competitive cycles. Some may still be relevant!  It all depends on the maturity of your market, the number of players, the space for growth, the cost of entry versus the attractiveness of your market & hence the consequential ferocity of competitive activity! The more competitive the more business owners/directors r forced to seek competitive advantage!!! 

For those looking for the next wave of competitive advantage, we r saying it is 'Human Capital Value'! Your people business is your people no matter what your do! Think about it! Every cycle of competitive advantage has been based on a technical advantage; product, cost, efficiency, service, relationship, experience! But what makes this happen is your people & how you support them!

Whether or not you succeed depends on the quality of your people (their talent!), how your organisation manages, distributes & develops your knowledge management & intellectual property! And the effective execution of your strategic business development initiatives! The combination of the three (Human Talent, Knowledge Management/IP & Effective Strategic Business Development) we call Human Capital Value - your people are your business no matter what you do!

Unfortunately people r seen as a cost rather than an asset & this is reflected in the way an organisation accounts for its profit & loss! People r accounted as a loss! We think this is wrong & that the whole accounting of our P&L needs to be updated & changed to reflect our modern day circumstances rather than our Victorian/Manufacturing past where people were seen as a cost! Today’s circumstances r different!

The collective brainpower of our people makes or breaks our business! Hence just as brands, once upon a time, were unaccounted for on the p&l balance sheet, whereas now they are, accounted for as an asset, we are arguing, in the same way, the quality of your Human Capital Value needs to be accounted for on the balance sheet! That the collective brainpower of your people is categorised as an asset & itemised as an asset on the p&l balance sheet!

Research by David Maister proves that the quality of your human talent makes an huge impact on your profitably! In his model improving 1 part of a 6 part model can improve your profitability by 42% Yet how business owners/directors can leverage their Human Capital Value is not clear or straight forward! Through primary research, design & clear blue thinking NewAmbition has established the way how you can harness Human Capital Value as the next competitive advantage for your business! The power of your people is the potential of your business! Come to our evening talk & find out how you can leve